Decideware

In an excellent newsletter that I subscribe to, "Propulsion" by Tim Williams describes a great research technique to "look backwards" from failure in order to identify the issues that currently face a business.

"Account planners have an innovative research technique they call "The Obituary."

In individual interviews or small groups, planners ask consumers, "Let's say this brand just died. Write an obituary for the brand. What did it die of? Who will miss it? Who will come to the funeral?

Respondents are asked to put the brand's obituary in writing. Out of these responses come some fascinating insights about how consumers really feel about brands."

Tim goes on to describe how he applies the technique in his work consulting to agency executives - with a similar objective to help identify issues which can be addressed to help manage better client relationships.

We're familiar with the types of issues I'm sure Tim generates in his work.

Here are some examples of Relationship Obituaries we hear (and you may well have heard these as well)....

From a client:

"The relationship started out with the best of intentions but over time it grew stale. Vendor senior management never attended meetings and we felt isolated and under appreciated. At the end of the contract the business went to out to tender, much to the surprise of the vendor."

...and...

From an agency:

"The client never treated the us as a partner, they failed to share critical brand strategy and as a result the creative was never quite what it should have been."

I think this Obituary technique could be a great way to identify assessment criteria to apply in a formal supplier evaluation process and in particular, it could be focussed to reveal behavioral-based issues.

Behavioral based criteria, for example "information was not shared", and "management did not attend meetings" are much more easily actioned by supplier managers than non-specific issues, for example "there is no trust" or "they don't care about us".

I'm sure skilled researchers could guide respondents to go beyond top-line, non-specific concerns to verbalize specific, behavioral issues which can then be applied in formal evaluation programs.

The benefit of this whole approach is that by projecting into the future to look back to a terminal event (e.g. the death of a client-agency relationship) respondents have an opportunity to raise concerns in a low risk forum (the research setting) in advance of serious problems actually occurring.

So managers then have time to consider the issues, to perhaps gather further information to supplement the qual' work, and then to act to manage risk.

Author: Richard Benyon (Decideware)

With Thanks: "What if the advertising agency died tomorrow? By Tim Williams"

Purchasing.com offers a profile of successful efforts by Hewlett-Packard to improve their Supplier Management Process.

The article features comments by Operations Director at the Houston based Personal Systems Group, Tom Adams on how he focussed on a key objective of the program "to build partnerships with suppliers"

Critical to the program are two scorecards

Adams explains how the High Performance Supplier Scorecard enables HP to measure supplier performance and encourage positive behaviors, such as continuous improvement.

And, the Supplier Reverse Scorecard aims to ensure suppliers want to do business with HP by gathering honest feedback which is used in continually developing HP's supplier management business practices.

HP offer 10 Tips to 'Getting Useful Supplier Feedback':

1. Agree to formal and informal feedback from suppliers

2. Formal feedback can occur meeting with suppliers - such as monthly with strategic suppliers, quarterly with partnership suppliers and annually or semi-annually with transactional suppliers

3. Informal feedback can take place on a much more regular basis (even daily), via phone calls, emails and personal interaction

4. Consider designating an executive sponsor/champion to each strategic supplier, who talks with suppliers frequently and provides opportunities to share informal feedback

5. Create a formal process to assess supplier feedback. The first step should be to determine if the idea is worth pursuing. If so, come up with appropriate actions, and arrange for a team to work on those actions

6. Change may involve not much more than tweaking an existing process, not completely restructuring it

7. Respond to the supplier to let them know you are working on their idea

8. Implement the actions. Then provide the supplier with a way to provide feedback on the change

9. Be sure to get back to suppliers if you decide not to take any action on their recommendations

10. Finally, keep the whole process in perspective, remembering that it is designed to continue building stronger supplier relationships

Source: Purchasing.com & Hewlett-Packard

What Pharmaceutical Marketing Clients Want and Need

The Pharmaceutical sector is recognized as one of the largest, most complex, competitive and influential marketing environments.

A special feature in this month's PharmaVOICE, "Client Services" focuses on the client-agency relationship and reveals agency executives' perceptions of industry trends, best-practices and client needs.

While the challenges of successful pharmaceutical marketing remains, ahh ... challenging, some common themes emerge from discussions with major providers of communications services when asked the question 'what it is that clients want and need? from their relationships with their agencies.

In no particular order, those answers include the following:

Brand

Clients want agencies to demonstrate their commitment to managing the brand. No surprise here, but they now expect seamless brand management across a complex, disparate media landscape.

Training

Clients typically recruit their marketing team from the salesforce; these people need training in the skills that will make them successful marketers - agencies are well placed to provide that service.

A Partnership Approach

Clients are looking for their agency to integrate with the marketing team and other communication service providers to work seamlessly as one coordinated unit.

"The most important component of providing excellent client service is to break down the barriers that can form between client and agency."

Channel Agnostic & Integration

Channel growth and fragmentation has confused the media landscape. Clients need help understanding what strategies are most (cost) effective to help drive sales growth, short term and long term. And they want advice on how to integrate their marketing spend across various channels.

"Client service teams that are communication channel agnostic can better serve their clients by not only recommending the most effective communication tools for their brands, but by providing guidance on how all of their communication will work together."

Media Expertise & ROI

The rise of digital media channels has added to the complexity of the media environment and (re)fuelled the call from marketers (and their CFOs) for greater levels of accountability. Marketers want a better understanding of the ROI from A&P spend.

Author: Derek Groom

Source: PharmaVOICE.com

In a recent Blog entry entitled "The Marketing Organization – Can we manage it?" in ANA Marketing Musings, Bob Liodice (President and CEO of the ANA) made the following comments on Marketing Accountability.

"CMO’s have to seriously upgrade their credibility. As a function, marketing must continue to push for increasing levels of accountability across the entire marketing supply chain. Marketers are often disappointed due to a lack of credible metrics and measurements throughout the entire chain. A well-oiled accountability machine – that includes partnerships with Finance and an Analytics group – can provide increasing confidence that marketing does what it says it will do."

Blunt Tools

This concept of the "marketing supply chain" and its measurement is obviously very close to my heart. It is not surprising that CMOs do not have access to credible measurement and visibility. Most CMO's only have access to rudimentary tools used to monitor and measure agencies and these have been sadly lacking in bringing anything of great use to the CMO at a strategic level.

Fight the Good Fight

Your typical CFO has access to a wealth of information about their business processes. Comparisons of business units, benchmarking sales, budget trends, exception reports, global averages, normalized scores, capability assessments etc. They enjoy a very strong voice at the management table - armed with data to back-up their arguments and requests.

Why not your CMO?

Why then would each and every CMO not invest in exactly the same tool-set? Surely that would allow them access to the same armory of data that his or her peers have? And one of the cornerstones of marketing accountability should be the evaluation and rating of the performance of the company's key marketing agencies.

Now here is the provocative question - is your CMO being led to your company's management table without the appropriate tools to do his or her job?

Author: Richard Benyon (Decideware)

Should agencies position with client organizations as expert specialists or expert generalists?

Paul Bennett, Euro RSCG's new Australian head believes "one of the most pressing issues for the communications industry was the lack of expert generalists".

He believes the increasing fragmentation of media has "forced more people into specialist roles".

Further, that "in the northern hemisphere everyone has become an expert specialist but marketing directors need to be expert generalists".

So, he thinks "Marketing Directors are looking for agency partners like them" (i.e. expert generalists) and "that's happening now in Europe and North America."

Source: The Sydney Morning Herald, 20 Mar 2008

Author: Viji Ratnam (Decideware)

What is feedback success???

I was recently researching the "people-centric" aspects of Supplier Relationship Management, especially focusing in on how and why to collect feedback. I found a great definition for success ...

"Creates and/or reinforces focused, sustained behavior change and/or skill development in a sufficient number of individuals so as to result in increased organizational effectiveness."

Here are some tips that were elicited from research performed by the Multisource Feedback Forum. Carol Timmreck and David Braken created 11 guidelines for initiating and sustaining 360 feedback in performance reviews.

How many do you think have direct usage in delivering critical feedback to strategic suppliers and marketing agencies???

11 Tips to get there

1) Make sure the program sponsors within the organization have clear expectations for the process

2) Make sure the program sponsors understand the implications of their process-design decisions

3) Use pilot groups

4) Train both Evaluators (those who fill out feedback) and Owners (those who deliver the reports)

5) Train the managers who will use the data for decisions

6) Communicate progress frequently and thoroughly

7) Hold evaluators responsible for their input

8) Involve evaluators in feedback and action planning

9) Hold Owners accountable for de-briefing suppliers and action planning

10) Implement follow-up processes to ensure compliance

11) Provide adequate resources for coaching, counseling and skill development

Author: Richard Benyon (Decideware)

Reference: Harvard Business School Press, Managing Performance to Maximize Results

(Note, I have taken the liberty of changing some of the terms above to make them more appropriate for the management of suppliers or agencies)

This is the second article in a series inspired by a book published by Harvard Business School Press called "Managing Performance to Maximize Results". It is a compilation of articles, all based around Human Resources Performance Management - and in many cases the ideas and practical examples have direct parallels in the area of Strategic Relationship Management.

What we all hate to do!!!

One of the most difficult aspects of Relationship Management is how to tackle poor performance. Faced with an uncomfortable situation, people often simply gloss over the problems.

In a client-supplier relationship this can lead to 'churn' which in many cases comes completely out of the blue because underlying issues have never been surfaced and discussed, yet alone resolved.

Fix or Fire

When a significant issues has been identified, perhaps the first decision is whether you actually believe that the agency / supplier can improve? And secondly, you want an ongoing relationship with them. If you do then the next step is to engage with the agency / supplier to address the issues that you have identified. And at this point you need to invest to fix the relationship.

So here are three tips we have gleaned from the Human Resources space that can help in managing relationships with your few key suppliers.

1. Be Direct

The first element is to make sure that you clearly, explicitly communicate that the supplier's performance does not meet your expectations.

At the same time you should ensure that you also communicate that you do hold out hope for an improved performance. The fact that the discussion is being held is evidence of your commitment to fixing performance and continuing the relationship.

2. Be Specific

Address the specific issues. Detail exactly what is wrong. And how you think it could be fixed. And consider this, what resources are you prepared to mobilize to help fix it?

This element of the action or development plan has been mentioned in many previous Blog articles. Without a commitment to address issues, the entire process is merely performance evaluation, rather than performance management.

3. Be Objective

Do not attack the team or personality in any way. Be sure to stick to as factual an account as possible. it needs to be about observable events, not hearsay.

Try to maintain an objective eye and ensure that in no way does it degenerate into any form of personal attack.

You may find that keeping these three points in mind will help keep a focus on the future of the relationship and not allow it to degenerate into a historical beat up session.

Author: Richard Benyon (Decideware)

HBR recently published an interesting article written by principals at Vantage Partners advocating the need for Alliance Managers to adopt a new set of rules to achieve better results.

While alliances are typically outside the scope Decideware's operations (assessing key supplier relationships), we think the article offers interesting insights which can be applied more generally to most client-supplier agreements

Corporate alliances exhibit a particularly high level of company interdependence with high expectations and significant risk.

While apparently they're growing at 25% pa and account for nearly one-third of some companies revenues and value somewhere between 60% to 70% fail.

So what's needed to improve the likelihood that an alliance will be successful?  

Vantage have identified 5 key principles for alliance management.

1. Focus on how you'll work together

 Move beyond business plans and contracts (both necessary and sensible) to focus on the working relationship.

• Accept that disagreements are inevitable, agree on how to manage them
  
• Understand how the other team works - decision making, budgeting, resource allocation, etc
• Discuss and define in pragmatic terms how the two teams will work together.

2. Develop metrics pegged to alliance progress

Many alliances take years to produce results.

In the interim, build performance scorecards which focus on the quality and productivity of the relationship.

That is, focus on the 'means' to achieve goals that will not be delivered in the short-term.

Consider metrics such as:

• Information sharing
• Developing new ideas
• Speed of decision making

Deploy scorecards to help drive the relationship and ensure that both parties articulate their mutual expectation.

3. Leverage Differences

Partners enter into alliances because they're different.

Differences like customer segments, markets, technologies, processes know-how, etc.

As the relationship matures, remember it's those differences which made the your alliance partner attractive.

4. Go Beyond Formal Governance Structures

Yes, a formal governance structure is vital.

But consider adopting behavioural protocols which encourage a mindset of inquiry rather than judgement.

Develop and tracking adherence with behavioral protocols can help drive collaboration.

5. Spend Time on Managing Internal Stakeholders

Sometimes the focus on alliance management is so heavily skewed towards the other party that efforts to ensure internal stakeholders are on-side are forgotten.

To achieve true buy-in across the company managers have to direct some of their efforts to ensuring business units are committed to, and aligned with the alliance objectives and process.

Source: AFR Boss, 25-28 2008

Author: Viji Ratnam (Decideware)

Most managers in Strategic Relationship Management (e.g. Marketing Agencies or Strategic Suppliers) can list a fair number of reasons why relationship evaluations should be conducted on a regular basis.   A typical list is shown below.   The problem with these sorts of lists is that the benefits are all a little theoretical and lack direct practical relevance.   Forget the theory, how do relationship evaluations really help?   What practical help can I get from them?

In responding to these questions managers need to re-frame the objectives they seek to achieve from relationship evaluation programs.   There should be 3 basic expectations:-

a) Help the organization get what it wants from the agency / supplier relationship (outputs);

b) Help the organization get these more easily (process);

c) Help with delivery of results (outcomes).

Getting What You Want From The Relationship

The key to getting what you want from the relationship is to make it clear from the outset what it is that you want, and then to measure it.   As we often note: “People do not do what’s expected – they do what’s inspected”.   So it is important that the evaluation criteria in an evaluation program are carefully chosen and carefully prioritized for importance.

This is probably best accomplished by having all top managers involved in the relationship take part in the identification and prioritization process.   This has the added benefit of ensuring buy-in and cohesion i.e. everyone on the client side will be singing the same song.  

From the Agency / Supplier’s perspective, clear identification and prioritization of evaluation criteria helps them see exactly what you want and gives them the assurance that it is what you all want.   Armed with this information the agency can allocate resources and time appropriately.

If the Agency / Supplier knows what you want they have a better chance of providing it smoothly.

Getting what you want from the agency / supplier is sometimes referred to as Expectation Management.   If you can’t measure it then you can’t manage it.   Make it clear in the evaluation criteria what you want and then measure it!

Getting Things More Easily

Most large advertisers or strategic supplier managers today have multi-agency/supplier line-ups.   Whatever benefits this affords, an offsetting common problem is getting the various organizations to work together smoothly and cooperatively.   How can Client organizations more efficiently manage multi-organization line-ups?

One answer is better use of the relationship evaluation program.   If clients make it clear that cooperation between agencies is a priority – and that agencies will be evaluated and rewarded accordingly – then this is sure to lead to easier management and coordination.   Reiterating, people and orginazation do not do what’s expected, they do what’s inspected.   So if you want your agencies to cooperate with each other tell them, and tell them they will be assessed for their performance on this measure, and compensated accordingly.

Use the relationship evaluation program to help get what you want more easily.

Delivery Of Results

Most organizations these days have in place some kind of incentive compensation program.   The whole point about these programs is to further encourage focus and performance.   The Agency is set objectives and rewarded accordingly for achievement.

It is important that the incentive compensation program ties in with the evaluation program.   The two should complement and reinforce each other.

Summary & Conclusions

Relationship evaluation programs can deliver real value and practical help if they are set up and implemented correctly.   The keys to success are:-

Be sure that the program is measuring the right things.   Be sure that the evaluation criteria set out what’s expected of the Agency / Supplier in the relationship.  

If you have a multi-agency line-up, use the relationship evaluation program to encourage cooperative working.   And tie this to the incentive compensation program.   Your life will be easier!  

Ensure that the incentive compensation program complements and reinforces the evaluation program.   Once you have made it clear what you want from the Agency, encourage them to focus on this by rewards from the incentive compensation program.  

Benefits Of Performance Management Programs

1. Establishment of goals and priorities in the relationship, and the benchmarking of performance against these.

2. Identification of strengths and weaknesses in the relationship (particularly so that weaknesses can be addressed early before they become real problems).

3. Facilitation of good communication and understanding between the advertiser and the agency/supplier, particularly at the senior level.

4. The tracking of performance over time.

5. Formalization of various ongoing informal comments that occur during the everyday life of the relationship.

6. Cross-comparison of performance across agencies/suppliers (where clients have multi-agency/supplier arrangements).

7. Help with the assessment and calculation of incentive compensation payments. 
 

Author: Derek groom (Decideware)

Adweek not long ago highlighted the 50 year relationship between Publicis Groupe’s Leo Burnett and insurance giant, Allstate.

At a time when so much is written about the decline of long term client - agency relationships, this one receives plenty of interest.

The article reveals the five things Lisa Cochrane, Allstate EVP of integrated marketing and Nina Abnee, Burnett EVP of account management learnt from having survived and subsequently prospered from a difficult period in 2003.

They identify 5 important learnings to building a successful long term client – agency relationship:

1. Be Honest and Commit

Allstate's Cochrane was honest in naming problems with the relationship.

However, she also gave her commitment to work with the agency to solve those problems and to build a better relationship.

That gave the agency an environment where they could confidently air their views and make changes to the way they did business with their client.

2. Accept Responsibility and Rebuild Trust

Both sides accepted responsibility for previous weaknesses in the relationship.

For example, Allstate recognised they were responsible for the briefs and had, at times approved lackluster work. Burnet accepted they let staff become complacent on the brand and had lost sight of its essence.

Cochrane recognised Allstate was not the account Burnett people wanted to work on and set a personal goal correct the problem.

Significantly, there was agreement to change; in the way Burnett worked to Allstate, in staffing, and with new compensation arrangements that recognised business growth, as examples.

3. Listen … and Make Your Needs Known

Both parties invested in listening to the needs and expectations of the other, and to communicating their own needs.

Better communication brought out that Cochrane wanted more staff on the account, and for Burnett to liaise more closely with the media agency, Starcom. Abnee wanted better direction, strategy and approval processes.

With these needs clarified, both parties committed to make change. Said Cochrane "My team had to match the Burnett team in commitment and talent and experience."

4. Set Aside Time for Each Other

Aside from adopting more face-to-face meeting time and more opportunities to review work-in-progress, Cochrane and Abnee committed to monthly dinners (where Allstate and Burnet each took it in turn to pay) with the core team on each side of the business attending.

The shift to add informal meetings to the schedule of formal presentations provided another means to develop a deeper level of understanding.

5. Have Fun

Both sides admit the relationship still requires a significant amount of work and along with that goes some tension. So they’ve agreed to inject some fun wherever they can to help ease some of those tensions and facilitate a better working environment.

Conclusion 

Abnee makes an interesting concluding comment that perhaps summaries what’s most important to all of this when she says: “There were a lot of good people before us, and there are going to be a lot of people after us. At some point there has to be a commitment to the brand.”

Source: Adweek, Lessons from Allstate, Burnett, 23 Jul 2007

Author: Viji Ratnam (Decideware)