Livingston Consulting

One of my kids – the one who graduated from college last spring – is operating a blog entitled RealWorldReally.com. Seems he’s experienced some angst during his transition from a lifetime as a student to the realities of life in the outside world, and he’s determined to provide advice and counsel to those following close behind him.

We’ve all heard bromides such as “the only constant is change,” and the simple reality is that change is being thrust upon all of us, all the time. Some anticipate it, most react to it. In some cases, change leads to chaos. Organizations experience change at an even greater rate: consider the cumulative effect of the changes happening to all the individuals who comprise the organization, for example. Plus changes occurring both upstream and down, among suppliers and customers, clients and constituents of various stripes.

With the focus right now on the slowing economy, it’s appropriate to consider that we are most likely embarking on the sort of systemic change that alters not only the ways in which we earn money, but entire lifestyles, communities, social orders and, ultimately, history itself. We’ve read about the transition from rural to urban, from agricultural to industrial. Most of us have experienced in some way the transition to post-industrial and then to the Information Age. It appears that we’re on the cusp of something at least as dramatic: the post-information age, the age of the Green Economy, complete with a new set of green collar jobs, green chip stocks, and new opportunities to prosper while helping solve the problems associated with global warming and dependence on antiquated fuel sources and uses – a chance to “do well by doing good.”

Are you ready? It’s going to be a wonderful ride!

Here in Maine, the local media have been spending lots of time and ink in the past few days commemorating the 10^th anniversary of the Great Ice Storm of 1998, perhaps the worst natural disaster in Maine in a hundred years or more. Few people were completely able to avoid any aspect of the killer storm, the aftereffects of which persisted for weeks. But once the initial shock was absorbed by most people, the collective mood quickly changed to one of concern – for the neighbors. Many of us, in fact, got to know for the first time people we had lived beside for years, and nearly everyone had a circle of acquaintances for whom they were looking out. News accounts at the time – along with then-Governor Angus King – attributed the limited loss of life and the ability of the state to rebound quickly enough to minimize impacts on the economy to precisely the fact that people took it upon themselves to focus on community rather than self.

The Maine Community Foundation is a champion of the concept of social capital, and while that organization is currently planning how to optimize the return on investment of social capital, it also cites the responses to the ice storm as perhaps the finest example hereabouts of social capital at work. At a time when, led by the efforts of GrowSmart Maine, the state legislature is now beginning to recognize the importance of quality of place, those rather elusive characteristics that make Maine unique and attractive, it is important to note that such qualities are the product not just of careful economic development along with responsible stewardship of the environment, our natural resources and traditional land and sea-based industries. It is also very much a function of social capital applied just where and when it is most needed.

So here we are, waxing nostalgic for a shared disaster – not because of the privations it imposed, but rather because of the renewal of spirit it invoked.

Elsewhere on this blog is a posting entitled Bank Branding Gone Wild, and it seems to have resonated with readers, accounting for as many hits as the rest of the blog combined. Add to that the fact that at this time of year, many of us make an annual visit to the mythical town of Bedford Falls, where we are reminded of the saga of the diminutive Bailey Building and Loan. Why is it, I wonder, that George Bailey was never able to improve the profitability of his institution despite what was clearly a branding advantage relative to his competition, the predatory commercial bank controlled by Bailey’s nemesis, Mr. Potter?

Branding is an essential element of commercial communications, much of the time. It is the means of leading a horse to water, to both encourage your prospects to listen to what you have to say and, just as importantly, to reaffirm the commitment of your current customers. But you still have to provide that horse a reason to drink from your well, and simply feeling good about you usually isn’t reason enough; especially when your prospects probably aren’t all that unhappy with whatever institutions with which they currently do business.

The value of brand equity is vastly different in the process of establishing (or maintaining) a long-term relationship with a financial institution than it is for, say, consumer package goods; or automobiles. It’s different for retail banking than it is for stockbrokers and related investment counselors, too. I guess the point I was trying to make in the earlier post was that branding efforts should be employed to capitalize on inherent and unique competitive advantages, distinctions in the way one does business that are genuine and, especially, meaningful to customers. And such differences must be demonstrated rather than proclaimed, proven rather than asked to be taken on faith. “Trust me,” is not a brand. And brand, alone, is not reason enough for me to give you my money.

John Wannamaker, founder of the eponymous Philadelphia department store early in the last century, famously explained that “I know that fifty cents of every dollar I spend on advertising is wasted. I just don’t know which fifty cents.”

I know people who believe that their considerable investments in advertising – and other forms of marketing-oriented communications, for that matter – are justified when their friends tell them how much they’ve admired their ads. Many of these same people are loath to invest anything in research, in strategic planning, in customer or client relations, often because they think that doing so will deflect resources from their advertising budget. I’m not making this up: these are real people, real businesses, real circumstances. And, too often, real disasters.

Nearly everyone has had the experience of selling securities too soon, or not soon enough. Those problems, like those of the people who are more impressed with their friends’ comments than with the strategic realities of business, are exacerbated when we don’t have clear expectations of what those investments were supposed to do for us in the first place: a reasonable expectation of return-on-investment. What is a specific investment supposed to do for me (or for my enterprise) is a question that seldom gets the attention it deserves.

There’s a TV commercial this holiday season for a back massage machine. It’s been getting an enormous amount of exposure, clearly the product of a sizable investment. But I’m left wondering how many of those units the manufacturer must sell to justify the exorbitant budget; how can that level of expenditure possibly be cost-justified? Now, while I have to admit that there is a good deal of art involved in the science of marketing, it is nevertheless possible to establish realistic marketing or planning investment goals, to monitor progress toward the realization of those goals, and to thereby optimize ROI. Regardless of what your friends may or may not think of what you have to say.

This should be the most wonderful time of the year for those of us who provide strategic planning advice and implementation assistance: Traditionally, this is the time to look forward, plan ahead, establish some benchmarks for the new year. Unfortunately, it’s also the time that lots of people make New Year’s resolutions, and that is actually pretty frustrating to those of us who are trying to be professional and proactive about how we conduct business.

Make no mistake: Making resolutions is assuredly not the same as strategic planning. I once heard a set of business objectives dismissed as unrealistic with the admonition that “Those aren’t goals. They’re aspirations!” What’s the difference? Well, to begin with, meaningful strategic planning does not embrace the alchemy, the touchy-feely, warm fuzzy sort of bromides that are typical of many resolutions in this season. Real strategic planning is as much of a tangible and dispassionate component of business operations as accounting, legal assistance, insurance, or membership in professional and trade associations.

Strategic planning is specific, finite, deliberate and systematic. There have been, of course, all sorts of successes achieved without formal planning – and some people do win the lottery, too. And while it appears that somewhere between ninety-four and ninety-nine percent of New Year’s resolutions fail, the inverse is true for realistic strategic plans. I’ve yet to encounter an enterprise whose principals did not believe they were better off for having engaged in appropriate planning than not.

There are references elsewhere in this blog to the need for specificity and clarity in planning, and the essential role of articulating the how component of implementation, a need to be resolute about determining who will be responsible for what, by when, and (again) how. Perhaps if more resolutions addressed those component stages, too, we might all lose weight, stop smoking, exercise more and spend less time with our cell phones and Blackberries.