Archive for the ‘Growth Brakes’ Category

Hairdressers and Motivation

Wednesday, August 6th, 2014

I still hear, over and over, that you need to motivate employees with good wages. Repeating this proposition ad infinitum doesn’t make it any more correct. Motivation comes from within. Management must create a framework for ensuring that employees’ intrinsic motivation can expand. To that end, management must show the way, expand opportunities, foster talent. Management must not motivate.

And certainly not with money. Wages are important, but as a hygiene factor, as an expression of expectations, and as a reward for achievement (the latter is easily forgotten). A lot of money doesn’t mean a lot of motivation. Wages for length of service don’t help much, either. Performance is what counts.

And now to hairdressers (and barbers). There continues to be a steady flow of people into the hairdressing profession. There are world championships in hairdressing. Many hairdressers, men and women alike, dream of someday having their own salon. Or they are quite satisfied merely to work with people every day. That cannot be accounted for by wages. Ask your hairdresser or barber sometime, why he or she took up the profession. I do so regularly, whenever someone new cuts my hair. Money plays no role. And raising the minimum wage doesn’t alter the situation.

Evidently, motivation has something to do with depth of interest or commitment. Now that may bitterly disappoint mechanistic executives, but it’s true. You have a duty.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

“Experience” Land Rover: The Impact of Sales on the Impression of a Brand

Wednesday, May 28th, 2014

I am (or was) interested in a new Range Rover. On our quest, my wife and I experienced the following as we, accompanied by our dog, casually dressed in dog-friendly clothes, and me unshaven stopped by two Land Rover dealers that happened to be on one of our routes.

Dealer 1: A prestigious dealership that had the word “premium” worked into its name. There were a few vehicles outside, but no Range Rover. Only a couple of RR Sports and an Evoque. I went into the huge showroom. Empty. Not a single automobile. There was, however, a sales office. Inside was a salesman, who looked up reluctantly as I introduced myself I told him that I wanted to buy a Range Rover and that I was amazed to discover an empty showroom.

  • Salesman (looking me up and down): “Yes, the vehicles are all “over there.” There’s a sale going on.
  • Me: “All of them ‘over there’??”
  • Salesman: “Just so. What are you interested in? An Evoque?”
  • Me: “A classic Range Rover.”
  • Salesman: “A Sport?”
  • Me: “A classic Range Rover!”
  • Salesman (looking me over again, in disbelief): “Our demonstrator is out. I don’t have that model here. Delivery takes nine months.”
  • Me: “Thanks.”

End of conversation.

The next dealer:

  • Me: “Good afternoon, I’m Guido Quelle and I’m interested in a Range Rover.”
  • Salesman: “Hello, my name is . . . and that is most convenient because I sell Range Rovers.
  • Me: “What a coincidence.”

We both laugh. We leave the showroom and head for the lot. The salesman greets my wife with a handshake.

The conversation continues pleasantly. The salesman takes seriously my amazement at the delivery time, but there’s nothing he can do about it. Besides that, the new, extended version currently has delivery time of three years (!), about which he himself is not particularly ecstatic. He would be happy to arrange for a demonstrator, but he couldn’t change the delivery time.

We departed on good terms—a good conversation. Three guesses as to where I’ll shop for a Range Rover next time, when delivery times once again become reasonable.

Lessons:

  1. For a brand, the “front line” is decisive. The first salesman damaged the Landrover brand; the second one made up for it.
  2. Range Rover offers an example of what happens when being unprepared for success damages the brand, in this case because of unreasonable delivery times. In any case, I won’t be ordering an RR.
  3. Never let yourself be controlled by appearances—never. Moreover, instruct your sales department not to make judgments based on appearances. Even people in casual clothing can pay for a car, a watch, a piece of jewelry, or a house.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

“So, You’re Going to Set My Business on a Path to Profitable Growth?”

Tuesday, May 20th, 2014

The opening of a recent conversation with a potential client: “Professor Quelle, I have already heard quite a bit about you, among other things one of your speeches. So, you’re going to set my Business on a path to profitable growth?” – Me: “No, YOU do that.” A pause. Laughter. A lively discussion ensued.

This potential client had recognized the difference immediately. It’s not the consultant—and it shouldn’t be the consultant—who implements changes in the client’s company. Such steps have to come out of the company itself. We help companies to follow a different path. We impart necessary capabilities and skills. We guard against taking steps that, in our experience, regularly lead people astray. We see things in the company that otherwise are not seen or cannot be seen. We supervise the implementation. But the implementation itself must come from within. Otherwise, the entire concept will be built on sand.

Too many consultants regularly overrate themselves, and too many consultants are retained as overpaid advisers, day after day, for years. The impact of a good, experienced consultant lies in multiplication, in boosting the available energy, and in building know-how—not in taking over routine work. Clients should not become dependent on a consultant.

Growth consulting, as we understand it, is to translate our knowing into your doing.
And by the way, that potential client at the top of this post? He did indeed become a new Mandat client.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Dear Growth Critics, Just Get on with It!

Saturday, May 17th, 2014

Here is a plea to all critics of growth—along with a few ideas.

How about . . .

  • Significantly less pay (or at least frozen salaries)
  • A longer workweek, like it was, say, in the ’60s?
  • Wash dishes by hand.
  • Wash clothes by hand.
  • Write letters and (not even) faxes instead of sending emails.
  • Turn off the Internet.
  • Give up your car.

I could make still more suggestions. Oh, so you don’t want to begin with yourself? Everyone else has to get on board, too?

In all honesty, I can no longer listen to this talk about the dangers of growth. I would be delighted if for once, we looked at all that we and, above all, preceding generations have accomplished, and then press boldly forward.

 
© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

What Miles & More and Portfolio Management Have to Do With Each Other

Thursday, March 6th, 2014

A few days ago, my assistant handed me a letter from Miles & More, Lufthansa’s frequent-flier program, that said the following: If you were to participate in a consultation with a Commerzbank “individual portfolio-management” adviser – and you have liquid assets of 250,000 euros or more (see the fine print) – and if you were to display your Lufthansa “Senator” MasterCard, afterward you would receive 15,000 bonus miles.

Excuse me! What’s that all about?

If Miles & More were our client, we would have strongly advised our client against a link, even conceptually, between Lufthansa and portfolio management, never mind the associated offer of 15,000 bonus miles. That’s not where growth comes from. This is how brands create confusion. Does anyone really think that someone seriously considering the option of portfolio management – or even more unlikely, someone considering a change of portfolio managers – would be tempted by 15,000 bonus miles? Does anyone really think that the Lufthansa or Miles & More brands are suitable for portfolio management?

Portfolio management has something to do with personal trust. A trustworthy airline is of no help here, and bonus miles are even less helpful. Even the suggestion that “Commerzbank investment specialists always act for your benefit” isn’t really all that helpful. Bad enough that someone has to bring that up. What else, may I ask, should an “investment specialist” possibly do?

One thing is for sure. The letter made its way into the trash can next to me. But what bothered me even more is how misguided it is to embrace every business opportunity that presents itself – as we have seen here. I was annoyed, and I’ll bet any money that I’m not alone.

Back to the headline of this blog post: “What Miles & More and Portfolio Management Have to Do With Each Other”: Nothing. Bottom line: Let it go.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Less Content = Higher Return = Success?

Wednesday, February 12th, 2014

One of the most shameless, most unimaginative possibilities for stabilizing business results or causing them to grow – and one that shows a lack of self-confidence – consists of offering less while charging the same price. There are plenty of examples of this: The chocolate bar, which hasn’t weighed 60 grams in quite some time, still costs the same. The package of tissues that now contains only nine tissues instead of ten as before – for the same price, naturally. Or the jar of jam that offers ever-shrinking contents, likewise for the same price.

This “strategy” (I absolutely must enclose “strategy” in quotation marks here, because it is really no strategy at all in terms of growth smarts) is plainly stamped with disrespect for customers, for consumers. What kind of fools do they take us for? How far will they pursue this? An M*** bar that, at some point, will weigh only three grams and still cost 1.20 euros? Or how about a package of K****** tissues that has not a single tissue in it, yet we still have to pay for it? Bring your own jam to the store and then pay for it? How would that be?

Enough ranting. Back to the logic of growth: When businesses find it necessary to take such an approach because they can no longer cope with their costs and want somehow to maintain their profits or even increase them; beyond that, when businesses deceive themselves that they are up against certain price barrier that they simply cannot overcome; when businesses lack the self-confidence to raise prices because the competition is supposedly too stiff, then these businesses haven’t done their strategic and marketing homework – or at least haven’t finished it.

We have planned and implemented numerous price increases for our clients. Of course, doing so cost them some customers. But we much prefer to build a strong brand, to say honestly what value there is in purchasing products from this brand, and to generate “top-line growth,” as it’s called, than to enter a downward spiral of providing less at the same price, because the consequences thereof are readily foreseeable. Price increases in which we participated have in any case led to profitable growth for our clients.

In comparison, “less content for the same price” is a strategic error that contributes to the erosion of the brand. Even if you don’t notice it right away.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

The Washington Post, Bezos, and Growth: What We Can Learn

Wednesday, February 5th, 2014

Perhaps the most noteworthy sentence concerning the sale of the Washington Post to private-investor Jeff Bezos is to be found in a letter from Donald Graham, the publication’s chairman. “The newspaper business hasn’t stopped raising questions for which we have no answers,” wrote Graham, as quoted on the German newspaper Frankfurter Allgemeine’s website this morning.

Aside from the fact that I find it commendable when a company’s leadership concedes that they don’t have answers to questions on the horizon, there are lessons here for all of us who grapple with growth.

  • The other guys: The “newspaper business” cannot raise questions. It’s not the other guys. As the Washington Post, you are a part of the “newspaper business.” The Post can, should, and must help to shape it. The opportunity passes you by while you’re thinking about the “newspaper business” in the abstract.
  • The target audience: There are indeed newspapers that operate successfully. So, what was the fatal flaw? What role did the readers play? Are they dying out, as is the case with some newspapers? Did the Post neglect to refine its target audience? So it would seem.
  • The brand: As a result, the brand wasn’t refined to keep up with the times. The Frankfurter Allgemeine plainly illustrates that some such refinement happens, even in the sector’s conservative companies. Although the Frankfurter Allgemeine wrestles with even the slightest change (something that makes sense!), the newspaper continues, for instance, to develop on-line business – and even paid on-line business – without sacrificing high editorial standards.
  • The employees: It is not the chairman’s responsibility to find answers to questions about the “news business,” the more so because the Washington Post reportedly generates only 14 percent of corporate sales. It is, however, the employees’ responsibility to move a newspaper forward. Part of this is cooperation among the editors to achieve – in the case of the Washington Post – the required high level of quality. But part of this, too, are employees who work at strategic and tactical positioning, and who consequently come into conflict with the editors. It is quite apparent that there are considerable shortcomings here.

The problems of the Washington Post lie in the more-distant past, and not so much in recent days. The brakes lie within the company, not outside it. They neglected to further, purposeful development of a company, a storied brand, and they neglected to accept that change, focus, and omission are crucial drivers of profitable growth.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Resolution through Passing of Time

Friday, January 17th, 2014

German case law recognizes the concept of “resolution through passing of time.” If an administrative act refers to a point in time that has passed or to a time frame that has expired, and the act is irrelevant to follow-up actions, it can be said to have resolved itself. Here we have significant parallels to the business world, where the idea certainly applies to such brakes on growth as:

  • Deliberately or negligently kicking important matters down the road.
  • Watchful waiting.
  • Timidity in addressing topics that are central to growth when confronted with their sheer scope.

People who deliberately or negligently let the clock run down have lost nothing in a high-growth company? Quite the opposite: Senior Management of a company oriented toward profitable growth would do well to ensure that crew members placed at the helm don’t just sit there and let things transpire merely because time has run out. A question of leadership, as usual.

Many thanks to the commercial manager of one of our client companies (she also happens to be a lawyer) from whom I learned of this splendid concept as I was composing this piece. “Resolution through passing of time” in business? No, thank you.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

Who Pays the Piper Calls the Tune

Wednesday, January 8th, 2014

Growth is also a matter of effective management. Although many businesses wish to act in a way that promotes growth, they complain that it doesn’t happen. Very often, benchmarks, incentives, and management systems are to blame for matters going off course.
• If the purchasing department is encouraged to buy quality products and services, but the only benchmark is price or there is no way to measure success . . .
• If the human-resources department is commended for the number of applications solicited without regard to the quality of the employees or how long they remain with the company . . .
• If the sales force is urged toward visiting a specific number of customers every day without considering the impact of these visits . . .
• If logistics are evaluated on the basis of costs without taking into account of additional turnover that might be achieved by spending a bit more, oder . . .
• If Senior Management is compensated only for a rising EBITDA without regard for the sustainability of the measures they have embraced . . .
. . . then we aren’t at all ready to talk about stable, profitable growth.
People take their cues from the results for which they are evaluated, commended, and paid. Every system seeks to satisfy its own requirements. With that in mind, a growth-oriented Senior Management ought to consider carefully which benchmarks induce what kind of behavior.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.

How are businesses supposed to grow, when . . .

Friday, January 3rd, 2014

. . . the following are still part of the daily routine?
• Cell phones turned on and ringing.
• Repeated ringing of the same person’s cell phone.
• Regularly being late to meetings while mumbling an unintelligible apology that wouldn’t have been any better had we been able to understand it.
• Pronouncements such as “we won’t go through that in detail just now,” which is inevitably followed by the same person’s going through it blow-by-blow.
• Meetings scheduled to go from 9:00 to 5:00, with 28 items on the agenda.
• Meetings scheduled to go from 9:00 to 5:00 that last until 9:00.
• Meetings with no purpose.
• Participants who come to meetings unprepared, which prolongs the meeting significantly.
• Truly disparaging talk about some individual or department not represented at the table.
• Blind adherence to 30-year-old positions that were wrong even then.
• Incessant repetition of inaccuracies, usually with increasing volume.
• Face-saving insistence on old positions when confronted with better knowledge.
• To assume, except in an airplane cockpit or hospital operating-room, that there is a point-of-no-return.
• A spirited “just one more little thing,” followed by something long-winded (to address a point, to end the meeting, to try something out).
• A meeting that comes up with no “next steps.”
• Poor enforcement of supposedly-adopted standards.
• A narrow approach that limits freedom of action.
• Rewarding invalid arguments.
• The thought that something would “sort itself out.”
The good news: If we can just rid our businesses of these trifling irritants, we’re already better positioned for further growth.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.