EVERY LITTLE...

No this is not about Tesco which is doing much better under Dave Lewis. Before he came along a better strapline might have been “Every dozy dinosaur needs a kick up the arse”. Having said that I have no idea why they’re targeting Aldi with their new Jack’s stores.

They are going down-and-dirty and as an occasional Aldi shopper I know it’s not down-and-dirty but just has lots of low cost, high quality products. Professor Mark Ritson in Marketing Week said Tesco should be trying to be a better Tesco and not trying to be like Aldi. Aldi is brilliant at being Aldi -  like a shark, ruthless and very efficient. This applies to Lidl too. Both examples of great retailing and high productivity.

But this blog’s not about Tesco it’s about the middle class darling Waitrose or as it’s now known Waitrose and Partners. Warning bell. An expensive rebranding exercise and  the worst profits for years. Does any connection spring to mind?

Let me confess two things. I like the partnership model and I like shopping at Waitrose. But for my loyalty to be maintained I need:
- It to stock what I want
- Its fruit and vegetables to be pristine – they charge enough to guarantee this surely?
- Its service to be exceptional

Recently little niggles have started to occur – rotten bananas, under-ripe avocados which ripen to black nastiness, constant stock-outs, no more Warburton’s bread that we like replaced by private label that we don’t like, slow service in the café, no more free coffee in the cafe on the Waitrose card, serve yourself coffee which runs out and is very messy.

It’s all very trivial, a series of little irritations but they combine to make me feel less loyal. And then it compounds…there are fewer staff around; where’s the presence of a jovial manager the sort who welcomes and is omnipresent; the rumour that you should stop using your Waitrose loyalty card because after a month the algorithm notices and the “lost customer” warning will kick in and you’ll start getting big discount vouchers to lure you back, much bigger than any “loyal” customer gets.

Little niggles build into monster gripes lead to customer loss. The “that’s typical” Victor Meldrew moments keep on happening. Sometimes there’s nothing you can do. I was told about a series of disasters at a hotel with an important customer. In desperation the manager offered a free meal with wonderful wine. All was wonderfully well until the sommelier spilt a glass of Lynch-Bages down the wife’s white dress.

We spend a lot of time talking about big pictures in business but big pictures can be ruined by a series of small smudges. Unless the process works brilliantly and consistently, unless that manager is leading from the front one thing can lead to another.

Every little cock-up leads to customers walking away – and who can blame them. Let’s not forget the maxim “the customer’s always right (even when they’re wrong”.)

TERRIBLE ADVICE

Rubbish solutions are in fashion

I’m not sure why this appealed so much to me but recently I was driving through Brighton behind a van emblazoned with a sign “Brighton Rubbish Solutions” and it occurred to me this was great name for a second or even third rate marketing consultancy. Mostly I guess because most advice nowadays is so suspect. Ask any economist – or rather don’t bother. I reflected further on businesses taking bold and sometimes strange decisions.

Like Jaguar. I saw their brand new Jaguar F-Pace recently. "Gosh" I thought “smart Renault!”.  It bore no resemblance to Jaguar refinement. If it were a painting it would be called a forgery. An SUV solution but a bad one.

Or Tesco’s secret plans to launch a new retail concept to fight Aldi (the UK’s favourite supermarket say  consumers) and Lidl. The conversations in Cheshunt where the mighty Tesco is headquartered have historically revolved around the risks to the brand and of confusing consumers in introducing a really cheap Tesco as opposed to a quite cheap Tesco. Trouble is Aldi is remarkable for its quality not just its prices. In a recent survey of 10 great value/quality grocery items in the Sunday Times Aldi had two – their prosecco and their new coffee pods – and Lidl one, their aged beef. Revealingly Tesco had none.

 

If they aren’t careful Tesco will end up with a rubbish solution. As Coca Cola have done in reversing their one brand strategy and relaunching their sugar free brands in isolation.

And in the world of economics  Bitcoin is either a genius introduction to the future of money or it’s the  next South Sea Bubble. Confusingly  it could be both. Which is a rubbish situation.

In the world of politics some weird things are happening. Politicians used to yearn for “clear blue water”  separating parties. Today an ocean lies between the wrathful disciples of left-wing-Momentum and the pinstriped intolerant Tory right-wing.

Let me introduce you to Jacob Rees-Mogg. America astonished the world by electing a game-show host who’s reckless, rude and crude. In the UK the bookies have two favourites for the next Prime Minister – Jeremy Corbyn (described by an American friend as Bernie Saunders without the brains) and Jacob. Ladbrokes and Coral actually make Jacob the narrow favourite.

Who is he?  48 years old. Educated Eton and Oxford. Co-founder of a Hedge Fund. He and his wife have around £100 million allegedly. He is strongly anti-Europe and advocates abrupt and total separation from the EU. He has six children. Their names are revealing: Peter Theodore Alphege;  Mary Anne Charlotte Emma ;Thomas Wentworth Somerset Dunstan; Anselm Charles Fitzwilliam ; Alfred Wulfric Leyson Pius; Sixtus Dominic Boniface Christopher. The names tell a story.

He has an icy charm. He’s clever, well mannered, calm and very dangerous. But chances are – if you believe the bookmakers – he could be the next Prime Minister. Or possibly another rubbish solution.

We live in strange times.

THINKING ABOUT BIG

I’m not against big businesses.  Not at all. They are full of smart and civilised people. They are important to our economy and our social stability.

I like Google and Apple (who doesn’t?)

I used to love the spirit Nike had in the period of their pre-21st-century glory. I love the confidence with which companies such as John Lewis, Heinz (now 3G) and BMW go about what they do. I enjoy seeing challengers like Deliveroo, Uber, Airbnb and especially Aldi, disrupt their markets and behave small (even when - like Aldi - they’re the 90th biggest company in the world, a lot bigger than Tesco with twice as many stores in 18 countries.)

But there’s something about big companies that’s beginning to worry me.

Mark Ritson in Marketing Week gets it spot-on when he castigates Apple for circumventing paying their tax:
“Apple is by no means alone in its attempts to legally minimise its tax responsibilities. Despite what all the naïve morons that espouse CSR and brand purpose keep telling you, there are very few brands that don’t actively and massively avoid tax liabilities to a disgraceful degree. What makes Apple notable in this uniformly disgusting context is the manner in which Cook has continued to portray himself as a different kind of CEO, who takes his societal responsibilities very seriously.”

What worries me is being big can make you a bully and prematurely deaf. Being big makes you think ‘There’s my way and then there’s my way.’ Most of all, being big makes you an enemy of marketing. The big decisions you make will be about money, cost and margins, about downsizing, consolidating and acquisitions. They should be about people and what they want and need. They should be about marketing but they won’t be. And if you get too big to focus on marketing, well…you’re going to die.

Small businesses are about the future. They are about risk and about change. They are where innovation thrives.  They are about learning. They are about being busy doing important things. They are more in love with their top-line (their sales) than their bottom-line (profit). And they keep on trying to get better not richer.
Small businesses are lucky. They don’t usually have shareholders or if they do they don’t have analysts poring over their numbers. They don’t have a lot of out-of-date plant and investment in property they just don’t need. They don’t have a huge workforce.

But what don’t they have?

They don’t have enough money to have much wriggle room. So they need to be very smart if they’re going to survive.   Lord Rutherford the scientist said:

“We have no money so we shall have to think.” (Those who know me well will have heard that many times before.)

We’ve got to stop bending the knee to big business. The real future lies with companies creating the future and not protecting the past. And if they won’t pay their tax, however big they are, they can get lost.

BORING OR ENTHRALLING?

First thoughts.

Is it just me showing my age but when did elections get as boring as this one? As I recall When Wilson won in 1964 it was an exciting shock.

And his cabinet was full of intellectual superstars - Healey, Jenkins (above) and Crosland. People like Ian McLeod were in opposition. One sensed these were very clever people. One didn’t necessarily agree with them but they were heavyweights. I watched Roy Jenkins and Ian McLeod debating the finance bill in the commons in the early 70s - riveting, rigorous and courteous.

I just don’t think the calibre of people, thinking or debate currently matches that of these Titans.

Politicians now are not, as some would have it, inept. They are however a bit timorous, cautious and lacking in flair. I have been constantly surprised that so many seem to think being nasty (even if they feel it justified) is a good tactic. Voters mostly hate “rude”.

Try this tactic instead:-
“Ed (or David)  is a nice and I believe well-meaning man. Most politicians are but I believe he just has this policy wrong and it would harm the country if he were to win this election”

If our grandchildren behaved like many politicians do they’d be made to sit out. I love the idea of hearing someone say: “Teresa May I’m appalled. See me afterwards”

Second thoughts.

2015 has been different because the two of the most popular voices have been on the side lines but thrust centre stage by the media. Nicola Sturgeon and Russell Brand.

Nicola has grown in stature and 4% of the UK (that’s Scotland) seems to adore her and Russell is rather like an extreme left version of Boris. Both Boris and Russell are fluent, addicted to long sentences and are ever so slightly crackers (slightly?) That he and Nicola are the ones turning on so many is significant.

Don’t you think they really ought to get together and have babies - what fun that would be.

What both do is reflect our times, reach and inspire a few people - in Russell’s case a generation of non-voters, the millions of youth who can’t be bovvered. They are both of them articulate and fearless. They aren’t looking over their shoulders; they’re punching away and looking like they’re enjoying themselves.

In Nicola’s case the prospect of wiping out lazy Labour in Scotland may mean she’ll have every right to be a bit smug. But the Scottish brand is thriving.  Brand? Think Irn bru, Innocent and Pepperami all mixed together. Inspiration has conquered economic caution and it’s exciting. As is Russell’s brand of rebellion.

The old political brands look like Tesco or Sainsbury’s or Asda in a world of Waitrose, Pound Land. Zara and Aldi.

So I was wrong. This election isn’t boring at all; it’s enthralling and we’re lucky to have ringside seats. It’s the other fight of the century.

HASHTAGCONSULTANTSLASHTWITTERSLASHBRAND

I’ve been thinking about three things this week. The legitimacy (or otherwise) of consultants, Twitter and why branding works.

Let’s start with the proposition that we are a parsnip. As such life would be dull. Being an Essential or an Aldi parsnip would be a horrid fate. But imagine you were a Pershore Purple  and better still an Organic Pershore Purple Parsnip (notice the capital letter in “parsnip”) and all would be so much better.

Because language matters,especially when it comes to branding.

But it’s my inability to cope with just 40 characters and the new language of today which is crazy sparse and not easy for someone of my age to ship with. Twitter and I know each other, of course, but we exchange just curt nods

Until this week when the absurd Omnicom/Publicis ad agency merger collapsed in a crash of what I hear is over £60 million of advisor fees.  Here are just three of the tweets I saw:

“Damn. Omnipube was best name ever.” 

“Omnicom rolls over, blinks, stares perplexedly into the sleeping face of Publicis, thinks: My head! Where am I? I remember Champagne...”

“This whole failed Publicis Omnicom merger was like two magnets with the same polarity trying to attract each other.”

And here are those very magnets.

So now I get it. Brevity is the soul of wit and this blog already much too long.

Finally consultants or “people who are unemployed” as my mother used to describe them. I saw this quote from the splendid Erica Jong and felt myself nodding:

 “Advice is what we ask for when we already know the answer but wish we didn't.”

I believe in advice, I believe in asking others for help but the Job Centre for the unemployed is not necessarily the best place to go to find it. So back to branding.

I decided to create my own mega-merger of three consulting companies I set up in my head called McFinsey, Paine and Company and the Hoxton Consulting Group thus, at a stroke, in my lurid imagination creating the biggest consulting group who are proficient in - wait for it - strategy, leadership and change management. That should do it.

As the week rolled on I had two conversations - one about HR. 

“Aren’t we delegating management to this dubious department? You have a tricky people issue…call in HR (not)” and the second was about marketing. Someone said they had a large marketing department and I heard a voice saying:

“Why? Why would you do that - tie up all that fixed and probably mediocre cost when you could go out and shop for talent?”

It was my voice. Me, who’d spent a third of my life in marketing in a big companies. Yet marketing is an expensive investment when the brand (that very Pershore Purple of a thing) should be owned by the CEO and the board. 

Call in consultants with talent but just make sure they have a capital letter and brand name attached. And remember this - consultancy is a “thing” now.

www.colourfulthinkers.com

WHY UNDERDOGS START AS FAVOURITES

In the middle of the punishingly deep pile of books I got for Christmas is Malcolm Gladwell’s latest offering “David and Goliath – underdogs, misfits and the art of battling giants”. Ever since his first book “Tipping Point” I’ve enjoyed his ironic, inquisitive style and his ability to spot the counter-intuitive. His best insight to date was of the company which spent more time and money than anyone else recruiting the best talent from the MBAs in the USA.

That company (outright victor in the war for talent) was Enron.

This book first of all describes why David, armed with the pre BCE equivalent of a .44 Magnum (his lethal sling) was the guy to bet on when faced by an overweight clown armed with sword and spear. (Even I would take on Mike Tyson if I had a gun and he didn’t.) His point is that size is not everything.  Yet all the accepted wisdom is power comes from scale. Not if you’re Indiana Jones of course…

Ask little Aldi –grocer of the year for the second year running with sales up 31.5% year on year with car parks resembling that of a posh funeral, as they themselves ironically observe, as they count the tills being filled by their middle class conquests. They and Waitrose are close contenders for the best outfit.  Their trick? Price… yes but quality too. They keep on outscoring the others for taste and quality – sixteen gold medals from the Grocer Magazine - but they’re not so good on what David Cameron, allegedly, called “green crap.” They are on the verge of doing a David on the Goliaths –Tesco/Aldi. They also have the best advertising – check it out.

It must be hateful to fight the Vietnamese and Taleban when all you have are costly tanks and stuff with your soldiers away from home when your opponents have improvised explosive devices and motor bikes so they can get home for tea.  The key words are improvisation and home.

One of his other points is the law of diminishing returns. He cites alcohol. Most doctors will tell you a glass or two of claret a day is good for you. Friends of mine have taken this advice to heart and, just to be on the safe side, have doubled the dose - to nil beneficial effect.  But carry on to a bottle or so a day and the effects are detrimental. More of the same is not a recipe for success. Balance is the key.

Back to scale.  The thought that bigger organisations are ipso facto better is what’s troubled me for ages. Our inbuilt instinct for M&As and “buy-and-build” are plain daft as anyone sitting on an ailing out of town superstore will admit. This inbuilt instinct allied to the desire consultants have to apply old business models to new situations. (Well it worked for RBS ….QED.)

That’s something fast-on-his-feet David didn’t do.

IS IT WORKING?

In the late 1970s a poster appeared with the headline “Labour Isn’t Working”. This idea of the Labour administration failing and especially failing in the area of employment resonated so powerfully that Margaret Thatcher won the election.

The other day I was sitting in the train from Brighton thinking of the rose tinted past, a kind of UKIP moment. But it wasn’t as special as some like to pretend.  And life today puts me in so much better a mood than life in the past. Except for the unemployed… especially if they’re gifted…. and stuck….and playing to the rules of the past.

In the seats just ahead of me I heard this conversation. Two young guys just into their twenties speaking that “whatever, you know, excellent, awesome “  language as unfamiliar as French to older generations, meaning I got some but not all of it.

They were talking about getting employment…”I like the sound of that …. they’ve  got no deadlines and you get lots of time off… it’s a three month fixed contract… I can do it blindfolded.” Of course they were from Brighton and as they say down here well Brighton is different.

Whilst they seemed happy enough they’re living in a world where employee rights have diminished, work for many is a necessary means of getting by for now not about creating a future, where you only have fixed term contracts not jobs and terms of employment are unknown.

Maybe that doesn’t matter.

Because change shakes people up;  because the entitlement society (a mostly bad thing) is dying; because energy and application are in fashion and because I smell the whiff of an emergent, enterprise culture.

But the trouble with change is that some people get hurt. And we aren’t educating young people in the scale of this real change…probably because we don’t get it ourselves. But overall is it working? For parts of the service economy, yes.

Aldi, for instance, is now the Oxbridge of employers paying graduates £40,000 a year, plus a new Audi A4– nearly twice the £25,500 offered by lawyers, banks and Marks & Spencer. But you are expected to work all hours, do everything (“clean those lavatories”, “learn all the prices”, “do everything.”)

I used to joke that to get a job in the Pizza Express at Brighton you needed an Upper Second.  I don’t think that’s a joke any longer. So why am I so optimistic? Because in the middle of the mess I can smell the whiff of enterprise and adventure. The young people I heard were more savvy than they seemed.
They were behaving like consumers not employees. And in the end consumers drive up quality.