That Was the Year That Was - My Learnings from 2009....

It’s been some twelve months. Almost everyone I have talked to over the last two weeks or so has said something like, ‘this year of all years, I need a proper break’. I feel the same.

December 2009 certainly feels a very different place to be than December 2008. Twelve months ago we were in the eye of the storm. Northern Rock, Lehman Brothers and Bank of America were in the very recent past. There was a general view going into Christmas that there was worse to come – although no consensus about what that would actually look like for a business like ours.

Twelve months on, we have lived through a very challenging twelve months in business. This has also been the first recession in Lane4’s lifetime, and we leave 2009 a wiser business than we entered it. The uncertainty still exists of course (are we over the worst, or likely to see another dip?) however we have reasons to remain optimistic but not complacemtn. However, it doesn’t feel anything like as uncertain as this time last year. I was thinking when running this morning about what my top 3 lessons would be from this year. This would be:

• Leading a professional services firm in a bear market is very different to a growing one. Balancing optimism with realism is not always an easy thing to do, but over-playing either is very dangerous. As a running coach told me last week, ‘Your head needs to be far enough up that that your bodyweight is carrying you forward. However it can’t be held so high that you trip on something straight in front of you. Your chin needs to be up and your eyes fixed a few metres forward’. That feels spot on to me.
• I have also needed to challenge the way I manage. This has probably meant less breadth, more depth. I have tried to focus on the elements that we can control, and delivering against them. As Sir Keith Mills said at our conference, ‘’There are hundreds of dials in a cockpit, but you can fly a plan with just six if you know how’’. I’ve been lucky enough to borrow the brains of some fantastically insightful external to Lane4 who have helped me firstly confirm that I am using the right six instruments, and then interpret their readouts correctly.
• Finally – this year was proof that tougher times are an opportunity, not a threat. An opportunity for the talent in your business to stretch themselves quicker than they might otherwise do. An opportunity to gain advantage in a market which will be changing faster than before. An opportunity to catch the wave of the upturn. An opportunity to learn which of your own team will dig in and fight when the going gets tough. I never learnt a thing about the collective character of my football team when 3-0 up at home against the bottom of the league.

It’s always tiring learning a new skill – whether trying to learn to run with just a little bit of technique, flying a plane or leading and managing a business. No athlete trains without down-time to let the muscles recover, and a break is definitely a good thing.

It’s been the first three months of this blog. I hope you’ve occasionally found something interesting or thought provoking. I’d certainly welcome any feedback. Have a great Christmas and New Year.

Cheers

Matt

The Worst Kept Secret at Lane4!

The Daily Telegraph carries ‘exclusive’ news today that Greg Searle is returning to competitive rowing. He is aiming to compete at London 2012. He would be 40 years of age at the time of the rowing finals. There is also a strong chance that the final could be 20 years to the day since he won gold at Barcelona.
http://www.telegraph.co.uk/sport/othersports/rowing/6818615/Greg-Searle-on-comeback-trail-to-date-with-destiny-at-London-2012-Olympics.html

This is not quite as ‘exclusive’ news within Lane4. We have known Greg was getting back in top class shape ever since Greg romped home to victory out of the blue at the Lane4 Grand National – our 5 quarterly mile handicap running race. There is still a long way to go of course, but we know Greg well enough to know he will leave no stone unturned.

 Happily Greg will continue to work at Lane4 and with his clients as he moves along his journey – just as our Paralympian Clare Strange does. I have had the pleasure of being with Greg when he has shared his news in confidence with groups from two London 2012 sponsors. It has been fascinating to see their reactions. Although several of the individuals in the room work in and around the Olympic Games every day, the personal connection this news has created in the room was really compelling. Greg and London 2012 are already part of these organisations’ everyday working lives – Greg’s journey will bring these two elements together on a very personal level.

Sport meets business elsewhere in today’s Daily Telegraph. The header in the Business section has a shot of Tiger Woods, and reads, ‘With Friends Like Accenture…Tiger finds out the Hard Way’. The article criticises Accenture’s decision to pull out of their relationship with Tiger on the back of recent press revelations. It suggests Accenture’s investment has been spurious, and yet also that Tiger does not now deserve to be deserted. Whatever you make of the recent news, this is lazy and naive journalism. Accenture’s investment in Tiger to date has reaped Accenture massive dividends, but they are smart enough in a competitive market-place not to shout about it. They also have a brand to protect. They were right to be in the deal, and they are now right to pull out.

Modern sport at its best and worst in one edition of the Daily Telegraph. Good luck Greg - but don’t expect the same handicap in the Grand National next time mate!

Neither HR Director, nor Marketing Director, But Disciplined Business Leader!

Last night I attended a HR Magazine Leaders Club event somewhat provocatively titled ‘Is the Marketing Director the new HR Director?’. It was an excellent event.

Those who have visited this blog before will know this is a subject close to my heart. It is also bubbling up as a hot topic. Ironically I was facilitating a session not more than two months ago for the European Sponsorship Association where the discussion turned to whether the ‘HR Director is the new Marketing Director’. There’s clearly a little insecurity both sides of the fence!

Navjot Singh, Global Marketing Manager, Recruitment and Global Communications Manager at Shell talked compellingly about how marketing know-how had been integrated into Shell’s recruitment strategy to take them from also-ran to leader in high potential recruitment among their competitors. He shared how the use of behaviour models (as marketers would use every day to model customer activity) were used at Shell to predict the behaviour of job applicants through the process. Shell can not only predict the potential revenue that any new recruit would bring into the organisation, but also predict each individual’s performance once in the organisation.

On one level, yes, these are tools which are now beloved of the bigger marketing departments. For ‘job applicants’ in HR’s world, read ‘potential customers’ in marketing’s. For ‘performance once in the organisation’ in HR speak, read ‘lifetime customer value’ in marketing. However, on another level none of these skills are purely the preserve of HR, or marketing, or both. They are exactly the same techniques one might use valuing a business for acquisition, or deciding whether to spend money on a new factory or product launch. They are simply good business practice in a lean, less indulgent business environment.

For those of you who were good enough to read my last post, you may feel there is an inherent contradiction in this view given my criticism of the ‘commodity trading’ I witnessed at the CIPD Fair. I do not mean to criticise the process of using data to make decisions (quite the opposite in fact). I mean to criticise the laziness of organisations who use the data as not just as the rationale, but also the principle means of communication. To cite an example given last night, the organisation that recruits online, but never sends a tailored, thought-through rejection letter to the unsuccessful candidate with some insightful feedback. I was party to another conversation last week with a friend, where restructuring decisions had been communicated only within the context of total headcount reduction figures. No rationale for the change, or compelling thoughts about what the future might hold.

In my view, good business management practice is the insightful use of data to reach a conclusion. Good business leadership equates to be able to share the story behind those conclusions in a credible and authentic way with each and every stakeholder group - whether the leadership comes from HR or marketing. 

Navjot painted a picture of a world in the future where companies are applying to prospective high potential employees for their service, rather than the other way around. We are definitely seeing that the HR and Marketing communities need each other like never before. The biggest challenge, however, is that both these groups need access to a third set of skills – that of world class 21st century business management. Neither HR nor marketing will lead until they can manage – otherwise each simply offers a world of empty promises.

HR, CIPD 2009 and the Nonsense of the Employer Brand

After the Lane4 Conference on 11th, last week I was at the CIPD Annual Conference in Manchester. I have been to the conference most years since joining Lane4 just over 5 years ago. On one level it was a little sad to see the accompanying Exhibition this year – probably around 50% of the size of the event at its height. We are definitely seeing a market-place in transition. Jim Collins was discussing ‘How the Mighty Fall’ in the plenary session. Quite.
On one level I could take consolation from the fact that there were far fewer outplacement providers than recruitment providers unlike the HR Director Event in January. However, this time recruitment solutions were mostly delivering the search process online. James Caan was sharing ideas around how to maximise your online recruitment search. Ironically for an HR exhibition, it did a good job of communicating a feeling of ‘commodity trading’ people.
Against this fairly depressing backdrop, Wil James from Lane4 did a cracking job talking through the TUI Travel (Thomson and First Choice) merger integration process with Jacky Simmonds, TUI Travel’s Group HR Director. This was anything but a transactional piece of change management, as I will come back to.
Beyond the Lane4 session, the highlight for me was probably seeing an introduction of the CIPD’s ‘Next Generation HR’ work shared by the likes of BT and Nationwide. This picks up among other things on an emerging trend towards the blending of HR and marketing functions. To quote Andrea Cartright from Nationwide

“Over the past six months you might as well have called me a marketer. I have been wholly immersed in the marketing team redeveloping what the Nationwide brand is going to look like.”

This is a much needed development which our thinking and work in the sponsorship space plays directly into.
It was ironic given this to see that the latest CIPD report published is ‘The impact of Mergers and Acquisitions on the Employer Brand’.

http://www.cipd.co.uk/subjects/corpstrtgy/empbrand/_impact_employer_brand_summary.htm
While I think CIPD’s approach in the Next Generation piece is laudable, personally I think the notion of creating an approach for an employer brand is complete nonsense. Your company’s brand is simply the way people (employee or customer) talk about your organisation. If the HR and Marketing Directors are doing their job well, employees and customers are able to engage in a personal dialogue with your brand. If they are doing their job excellently, this results in positive word of mouth and referral. It is simply impossible to paint a different picture for employees than customers.

To this point, in the Lane4 / TUI session Jacky talked compellingly with strong supporting data about the pride with which TUI employees (whether they originated with TUI or First Choice) now talk about their organisation to friends and family. A caring and empathetically managed change process created more external ambassadors than a thousand pieces of stilted internal communications or 30 second television ads would have done. Each business has just one brand. HR and Marketing and both its custodians. Perhaps in five years time the empty stands at the CIPD Event will be filled by Martin Sorrell from WPP and his swathe of marketing agencies.

Our Lane4 Brand

It’s been a few days now since our Client Conference, ‘From Fragile to Agile’ on Armistice Day, 11th November. It was our fifth year, and our client feedback is suggesting it was our best yet.
We try to schedule the day in such a way as to offer our clients the chance to design their own day. What continues to amaze me year-after-year is the sheer variety in the individual schedules which people select. Even clients who I think know personally very well!
For example, I was part of a session on the subject of the parallels between the London 1948 and 2012 Games with Rob Clarke, the Head of HR Operations from London Organising Committee for Olympic and Paralympic Games. Rob and I spoke at the same time as our clients from CRH shared their approach to investing in leadership development in a building products sector in the eye of the economic storm, and Mark Richardson with Greg Searle (both from Lane4) talking from personal experience about maintaining self belief under times of intense personal pressure and media scrutiny. It would be hard to find a more varied set of subjects, even for Lane4!
This blend also relates to how we position Lane4’s offer in the market-place. We aim to offer a hybrid of a world class leadership development consultancy (CRH). Our approach is driven from personal insight and experience (Mark and Greg) coupled with cutting edge research which marries both our understanding of elite performance in sport and business (Rob and I).
Interestingly when choosing their day, our clients spread themselves almost exactly evenly between the three sessions. No one area of our positioning or approach is more important than the other. We have the priviledge of working with a brand which sits at the intersection of these areas. It’s really gratifying to know our clients really valued the day. Roll on 2010!

Bolton versus British Cycling!

I recently spent a weekend in Bolton and was lucky enough to get to 2 sporting events – World Cup Cycling at Manchester Velodrome, and Bolton versus Chelsea at the Reebok Stadium. It is interesting to reflect on differences in the spectator experience.
 Cycling offered a full day’s entertainment for £15 per person. In the breaks in the cycling action I was able to walk the concourses to find 4 different food options (two of which were relatively healthy), experience four different sponsor products (one of which involving a 200m sprint on exercise bikes, and my very narrow but ultimately glorious victory against a 14-year-old!), join British Cycling, buy some gear and get some advice from a British Cycling coach as well as some free guides to cycling in the Manchester area. We even left during the intermission and popped to the ASDA next door to grab some nibbles.
Chelsea was somewhat different as an experience. We had a cracking view at Bolton, and it was a very good game (for a Chelsea supporter). The bar and betting shop in the stand was in full flow before the game and during it. My only real exposure to sponsor product was the smartly-done advertising in the toilets and the betting stand itself run by Bolton’s shirt sponsor. The television screens showed highlights at half time – but only of the highlights of Bolton’s best chances. The stadium was only three quarters full at the beginning, and half full at the final whistle.
The intent of this post is not simply to criticise football as a spectator sport. The experience at Bolton was absolutely what I would expect from a relatively modest Premier League ground where ticket revenues are only one part of the economic model, far behind domestic and international TV rights. Equally, the World Cup Cycling was exactly what I would expect from a sport on the up three years out from the Olympic Games where participation is the key to sustained success in the UK beyond 2012. The point, though, is that only once this weekend did I feel valued as a customer.
On the same weekend, UK Sport announced there would be a world class sporting event in the UK every two weeks between now and the Olympic and Paralympic Games. This is the window for British spectator sporting interest to broaden out beyond football. Based on this weekend’s experience, I think there is a real chance of this happening. Not once did anyone at Bolton thank me for coming.
If I had another spare weekend in Manchester, I would be taking my young son to another cycling meet rather than one of the 5 local football teams. It would cost me less to do this than buy two half time burgers at the football. I wonder whether it is a sign of the times that I saw ticket touts at the cycling, but not the football!

Market Trends and the Future - Retail versus Learning and Development!

Useful insight in the papers over the last few days of current performance and prospects for the retail industry in the UK. It was interesting to read about Westfield – the new high end shopping complex built in Shepherds Bush. Westfield’s UK Managing Director suggests the first three months of their year had been ‘very scary’….but cites some impressive evidence that performance has stabilised. The SVP of Louis Vuitton says their performance has ‘surpassed all expectations’.
Elsewhere, PwC’s retail director is quoted as suggesting that the middle ground of retail is becoming increasingly tough. A good example would seem to be the off licence trade – First Quench having gone into administration just last week. At the premium end, the wine clubs and consultancy-based propositions of Majestic reign supreme, and at the volume end of the market the economies of scale which Sainsbury’s, Tesco et all can achieve simply cannot be matched. Hence very tough trading conditions for those caught in the middle.

I believe we are seeing exactly the same thing in the learning and development market. In our experience the requirement for senior executive alignment and development is as high as we have ever known. Just like alcoholic retailers, quality, breadth of offer and credible experience are no longer a competitive advantage at this level – they are a given.

There is also a significant shake-out happening in the development market at middle and junior management (which I would very loosely describe as beyond the top 500 in a FTSE business). We are hearing words like ‘flight to demonstrable quality’ and ‘evidence-based value for money’ from our clients – and rightly so. For too long our industry has been oversupplied and, to be frank, a little lazy. Which feels a good description of the shelves on my last trip to Oddbins.

It is not easy of course, but this recession will be the best thing that has happened to our industry when we emerge at the other side of our V (or W!) shape.

Sponsorship - a Mid LIfe Crisis?

We are thick in the midst of sponsorship conference season. There’s an interesting debate brewing. Patrick Nally, one the most influentical figures in the growth of sports marketing, has suggested that sponsorship is entering a ‘mid life crisis’. His rationale is that the big bucks global media rights and tickets deals beloved of rights holders are increasingly redundant. To paraphrase - consumers know the rights have been bought at great expense. A pitch side billboard does nothing for me, nothing for the community, nothing for my daily working life, and certainly nothing for my propensity to purchase. It is irrelevant to me. The consumer will no longer pay a price premium just because a brand has decided to give $50m to UEFA.

Think about the private equity analogy again. When private equity professionals are buying businesses, they are looking for return over the next 4 years. The seller is regularly fairly aware of the value it currently holds. It is probably over-charging for it. The buyer will only pay the price if there are some extra areas, some newer streams of value they can see. Or if they can deliver value from the ‘regular’ stream more efficiently. That’s exactly where sponsorship sits at the end of 2009.

There is a way forward, because the newer sources of value do exist. Nally cites Coca-Cola as an example of a brand which as managed to emotionalise its FIFA and global Olympic connections in ways which makes sense. He is right. Sponsorship is a bridge to various stakeholder groups – consumers, trade partners, employees, government. All of these can be emotionalised to drive real, quantifiable value.

The current challenge is that the majority of the sponsorship industry has not grasped that the rules of the game have changed. All of sudden, rights owners cannot over-inflate the value of their traditional packages. I am sorry, but World Cup Final tickets are not ‘money can’t buy’ because I can buy them on seatwave. Those who are not prepared to challenge their operating model, and the ways they support their partners (not sponsors) in emotionalising their connection will be in trouble.

It’s less a case of mid-life crisis than a troubled late adolescence. Often one big event turns adolescent to adult. This often involves demonstrating that there is a ‘real world’ out there which is harder, tougher, and less tolerant than the heady teenage years. Let’s hope the recession is that one thing for the world of sponsorship, and the industry is able to respond.

2010 Planning - On the B of the Bang.

My good friend Steve Hacking, who writes a cracking blog at http://www.stevehacking.blogspot.com/, has just released a great post on the limitations of SWOT analysis in business planning. Steve rates the SWOT as the basic start, not the ultimate end game, of the strategy process. I completely agree.

I wrote in an earlier post that our mindset as we approached business planning for 2010 here at Lane4 was one of 'opportunity, not threat'. Steve says, ''I'm not saying that SWOT doesn't have its place at the beginning of the strategy development process; it does, especially if you start with the "O". O, for opportunity, forces you to take a moment to look around and speculate where the future pools of profit might be, which is especially useful for bringing out those areas that you're currently not doing anything about.''

We were in the 'O' phase during the Summer. Now we're making decisions. However decisions as Steve recognised should be anything but straight from SWOT to reality. We have been immersed in market insight, gathering customer feedback, financial projections, scenario analysis and like-for-like comparison between our ideas, recognising we can't do everything. Essentially September and October have involved a good dose of marrying our excitement with internal and external reality.

The good thing is that things are coming together. We are aiming to hit 2010 on the 'B of the Bang', as Linford Christie would say.

The Last Amateurs

I had the pleasure of sitting down and reading a few books cover to cover on holiday recently. A varied bunch - from the chequered history of the Tour de France to the fascinating 'Freakonomics'. The best of a good bunch though was 'The Last Amateurs' by Mark de Rond - an ethnographer from Darwin College, Cambridge who followed the Cambridge University Boat Club in preparation for the Men's Boat Race in 2007. It can be read as an ethnography, sports diary or insight for business into what it takes to build an elite team. I took pieces from all three angles, but also the chance to revisit a lot of sporting memories from my own time at Cambridge. Tennis is by no means rowing in terms of profile at Cambridge, but the highs and lows we all went through as a team trying to end our Varsity losing streak were the same.

Cambridge Boat Club enter de Rond's account in September 2006 on the back of multiple defeats, with a team (both coaches, coxswain and crew) perceived to have blown it when it counted in previous years. I won't share the outcome from the race, but if you do get a chance, I found it a tremendous read...

http://www.amazon.co.uk/Last-Amateurs-Hell-Back-Cambridge/dp/1848310153/ref=sr_1_2?ie=UTF8&s=books&qid=1255288848&sr=8-2

London 1948 and Rio 2016

I am researching a session for our forthcoming Client Conference at the moment on the London 1948 Olympic Games. It has been fascinating to learn how the Olympic Games provided such a major source of social, psychological and economic healing to war-torn Britain.

Fast forward to the IOC's decision this evening to select Rio as the home of the 2016 Olympic and Paralympic Games. There is no doubt that Rio's objective of using the Games as a lever for not just a growth economy, but a growth continent struck a chord. If 2016 achieves quite as much for Brazil as 1948 achieved for Britain, the 2016 Organising Committee will have achieved their objective.

All in all, I have to admit that I am disappointed on behalf of Chicago. That's sport I guess. Given that Britain will be handing Brazil the Olympic flag, let's hope they return the favour with the FIFA World Cup!

Come on Chicago!

It hardly seems conceiveable that it is fully four years ago now that Jacques Rogge said one word, 'London', which has already made such a huge difference to my life and our journey at Lane4.

Make no bones about it - I am crossing my fingers that Jacques Rogge's first word on openning the 2016 envelope is 'Chicago'. For two reasons. Firstly, on behalf of our North American business. Actually we share our office space in Princeton with US Rowing. I am certain our experience here to date will be a major source of value for us should Chicago win out.

Secondly - whether we like it nor not, the business and health of individual sports in the US drives the global sporting agenda. We now live in a world where golf is an Olympic sport, and it is critical for the less mainstream but in my view more truly Olympic sports that the US sports market continues to find a place for each of them. The Olympics is the pinnacle of achievement in sports like athletics, modern pentathlon, triathlon, track cycling and rowing. I was lucky enough to be in Beijing, and modern pentathlon held me captive more than I can ever imagine golf doing. I want the US public to feel the same in 2016 if the viability and health of the 'traditional' Olympic sports are going to be preserved in an increasingly homogenous sporting landscape.

6 Days to Go....

I did an interview this week with the Chicago business press in advance of the IOC decision. It's for a supplement to run (and only run) if Jacques gives them the nod. It felt strange to be debating whether Chicago could reach the $1.3bn sponsorship revenue they're expected to generate from the sponsorship.. it wasn't that long ago I was answering the same question for London!

My view? Irrespective of the economy Chicago can hit the number. However they will need to recognise from the start that London 2012 has changed the world of sponsorship for good. LOCOG have done a very good job thus far in a tough market.

I imagine domestic sponsorship for a Chicago Games will be a $80m - $150m corporate investment, with a need to pay back over 4-6 years. That's not a marketing investment figure in this market. Potential sponsors will be using the same disciplines as if they were buying a company of that size. It's not a world of viewing figures, it's a world of business models - revenue growth and cost savings, discounted cash flows. In many ways its the world of a venture capitalist - can I turn this asset around to generate a return over 4 years. LOCOG has been successful thus far because they have recognised that very early on. As it stands, in my view the US marketing industry is not set up to cope in the same way.  

Here comes 2010

September, as ever, brings the start of the business planning process for the year ahead. Much as I enjoy the continual to-ing and fro-ing of a busy office, sometimes there's nothing better than a long early morning run, a strong coffee, a blocked out diary and a blank excel spreadsheet to work with. In case you're wondering (!), we start with some trend-based forecasting at group level, and then compare this with detail from each of our regions and business strands.
As we grow, our planning has become more rigorous, and planning for 2010 is a good test. The devil is definitely in the detail - exchange rates, property interest rates and so on are increasingly critical parts of our jigsaw, and yet tougher than ever to predict. Even my currency trading friends in the City don't have a clue which way things are moving. Gut feel and instinct have a place in planning even in the FTSE.

Actually this year of all years there is not a single cost line that does not have an interesting question sitting behind it. Take IT. Will it really be 2010 when we'll really be able to halve our IT costs by binning the laptops and phones to move over to one device? When will we need to move to the 'cloud'? Like all businesses our size, we're increasingly aware of the balance sheet as well as the P&L this year. The principle is to remain cautious, while also setting Lane4 up for the next six years. Opportunities, not threats.

Given this, of course the spreadsheets are only part of the planning process. There will be decisions to make in the next few months where gut feel will be worth as much if not more than a theoretical spreadsheet answer. Lane4 is a 'heart' as well as 'head' business - our job is to marry the two.