WHY SHOWING YOUR STRATEGY ISN'T ALWAYS SMART

There’s this constant tussle between transparency and effective management. We see it daily with the cabinet describing the need to keep their cards close their chest in Brexit negotiations as though they were tremulous poker players. Everything has been reduced to process.

My focus is on three companies this week. They are Pepsico, VW and Royal Bank of Scotland.

Pepsico has a female Chair and CEO, Indra Nooyi, who in a radio interview described a research-finding about their brand Doritos.

She said, in brief, women were put off by the loud crunching sound they made when eaten and that their dusty residue meant fingers had to be licked. Women wanted a cleaner, quieter Dorito and that’s what was going to be given to them. A piece of careful consumer research leading to a targeted segmentation of the brand. Sounds OK; sounds like Pepsico is listening.

But all hell was let loose with women on Twitter frothing with rage – “Doritos for ladies? Ridiculous” …”I will eat my crisps however I damn well please and they will no longer be Doritos”….”How can you gender-type crisps?”

Indro Nooyi is a unusually smart CEO who speaks thoughtfully. She’s a model of restraint. No doubt she was surprised that you have to be so incredibly careful nowadays about whatever you say.
And whatever you do. Step forward VW.

They have admitted to funding a research study to test the effect of diesel emissions on caged monkeys. It didn’t take long for people to describe this as a German company creating gas chambers in which to gas little monkeys. These tests took place 3 years ago and Chief Lobbyist Thomas Steg has since been suspended. You couldn’t make that one up.

Next RBS whose Global Restructuring Group (GRG) had been castigated by the Financial Conduct Authority for mistreating thousands of small and medium-sized companies. The RBS Chairman Sir Howard Davies agreed these were the findings but disputed the conclusions. This one will run and run: “we’re not guilty…not…not!”

And another thing….Andrew Krepinevitch (no me neither). He’s a senior fellow at the Centre for Strategic and Budgetary Assessments and he’s regarded as an expert on strategy.

He identifies the ten biggest strategic blunders. Here are just four of them:-
-  Failure to recognize or take seriously the scarcity of resources.
-  Making false presumptions about one’s own competence.
-  Insufficient focus on strategy by trying to satisfy too many different stakeholders.
-  Failure to understand the adversary.

I was struck by these as being pretty much the current Brexit negotiating team’s issues. They constantly overstate our national and their own importance and intelligence. They try to keep too many people happy – a hopeless quest since many are never going to be happy whatever goodies they get. The last one is obvious.

Strategy is about knowing what to do, what’s possible and how public opinion can disrupt a seemingly  logical move. Easy? No it’s not. So pay attention. Even you the highly esteemed Ms Nooyi.

CH-CH-CH-CHANGES, TURN AND FACE THE STRANGE

Throughout my career I met people who said they loved change, simply thrived on it. They were, they claimed, a manic gleam in their eyes, change-agents. They were only interested in the future. “History is bunk” they said quoting Henry Ford. And I humoured them because a change, here and there, is the essence of progress. As it says in my recently published book on marketing - “Brilliant Marketing - 3rd Edition” - it’s “new and improved” - in other words changed.

But this year change seems too small a word. I’ve been arguing for some time that we’re living through a quiet revolution. After the US election and Brexit it’s not so quiet. And just wait as suppliers and retailers in the UK grapple with forthcoming inflation and a sales slowdown. More revolution’s imminent.

I say “forthcoming” but who can tell?  Our radar systems have all gone down. Research has become discredited. A senior fmcg executive recently said “we’ve more than halved our research budget. It wasn’t telling us anything we had any faith in”.

(Until November 9th  - David!)

This is the age of the contrarian, the thinker of the impossible. When the Saatchi brothers said in a Lewis Carroll moment “anything is possible” they were, at the time, guilty of hyperbole but, considered today, they were merely ahead of their time. In this uncertain world those apostles of change I described should be feeling delighted. But I bet they aren’t. We know that the most stressful moments of our lives - moving house, changing jobs and divorce - all involve real change, reappraisal and the need for difficult decisions.

Increasingly it feels as though we’re living with Alice in Wonderland where “If you don't know where you are going any road can take you there.”  Certainly that seems to describe our Prime Minister whose pose of confidence doesn’t conceal that she must be missing the Home Office where she was mistress of all she surveyed with no ghastly surprises coming at her from every direction.

Post-Truth has been named word (sic) of the year by the Oxford English Dictionary. It will, I think, be overtaken by “Post-Strategic” because arguably strategy has been replaced by tactical nimbleness, by the ability to change direction and avoid the unexpected. Diplomacy has been replaced by deal-making and poker (at least that’s how some Minsters describe the negotiations with the EU (“keeping our cards face down and close to our chest.”)

Perhaps the biggest surprises will be for two people discovering that running a turbulent country is neither the same as running a business empire nor heading a government department.

So it’s time to turn and face the strange…and the totally unexpected.

You’d better be ready. So here’s some advice….

Medical research (if you believe it) shows that snoozing before an exam is more efficacious than last minute cramming. So I recommend a lot more snoozing for all of us. We need to be prepared… for anything.

JUST DO IT

My favourite recent story was from Nigeria. The economy there is in a mess with frequent breakdowns in electricity. This means factories have to rely on expensive generators and this makes life hard.

The scene is a Lagos Stock Cube Factory in Lagos as electricity fails again.
BBC Interviewer: “How do you cope with this? It must make you very uncompetitive in cost terms.”
Stock Cube Company MD; “We just make as much as we can and hope for the best.”

The day a sophisticated CEO in the western world says “we hope for the best” which in a completely erratic world where you can’t control events is the right thing to think and do, is the day I’ll break into applause.

Herb Kelleher who used to be Chairman and CEO of Southwest Airlines in America, one of America’s most admired and successful companies, said once when asked about strategy at his airline: “We have a strategy here. We call it doing things.”

It’s that same action-packed attitude to life. Hurray for people who park their sceptical brains and get their hands dirty.

We are now off to Venice to what Mike Geoghegan ex CEO of HSBC described in a soulless way as
“Once the greatest financial powerhouse in the world and now a mere water attraction”

In that sentence we get to see what’s wrong with bankers.

As regards the weather, food, and aching feet we are going to follow our Nigerian’s advice and hope for the
best.