There is a Huge Need to Integrate Strategy and Execution

The July-August issue of Harvard Business Review has another excellent article by Roger Martin, Dean of the Rotman School of Management at the University of Toronto. In the piece, he argues that strategy and execution must be linked, but that they are not in most strategy courses in business schools, nor by consulting firms. It should be noted that Martin used to be a partner in a consulting firm prior to becoming Dean at Rotman.

It is clear that most people separate strategy and execution. How many times have we heard about a company engaging a strategy firm and then finding it difficult to implement the strategy once the firm is finished. I used to have a CEO who was fond of saying: "strategy is fine, but 90% of success is in execution". As Martin notes, one cannot be successful in execution independent of a good strategy, and one cannot have a good strategy independent of good execution.

It is interesting that in the brand and reputation world, most of the firms operating are execution-type firms. The brand firms do brand audits and then develop a new logo and set of identity guidelines. The advertising firms do advertising; the PR firms do PR. On the strategy side, McKinsey, Boston Consulting Group, and others are doing some brand strategy, but this is a very small part of their overall offering. There is a gap where Martin sees one. And, it is a wide gap that needs to be bridged.

Execution is becoming more and more commoditized in the brand world. Strategy is where the money is. So, implementation firms are typically staffed with junior people who do not really understand strategy; and the strategy firms are staffed with senior people who do not want to be bothered with implementation. When the strategy is done, it is "handed off" to the company which typically hands it off to a PR or advertising firm. The latter are typically not involved in the strategy discussions so they often implement against a strategy that they do not fully understand, unless they are briefed directly by the strategy firm or unusually well by the client. Advertising and PR firms say they do strategy, but they don't. They do advertising or communications strategy, not the type of strategy taught in an MBA program.

The difficulty is often with billing. Strategy firms bill thousands of dollars per day for even middle-ranked people; execution firms bill a fraction of this. So, when strategy and execution firms have tried to talk about mergers or working together, they often get stymied with billing. Clients who hire advertising or PR firms are usually not willing to pay $5,000-$10,000 per day for strategy; an strategy firms do not see the need to have an implementation group on the pay-roll.

In my own consulting practice at Brand and Reputation Management, I focus on linking strategy, brand management with employee engagement. I try to lay out implementation plans for the client, but I do not do the execution. I usually ask the client if I can help them brief the implementation firm so that there is a smooth transition to execution. But, this request is not always accepted. So, I have not connected all the dots, as Martin has pointed out, and could be serving my clients better if I were to connect with an implementation firm.

I have said to many people that there is a huge need for a brand and reputation management firm that has business and marketing strategy people, brand experts, researchers and implementation staff. There is nothing like that right now. Perhaps a first step would be to connect a few good firms together in common practice.

Deciding on the Right Brand Strategy

Brands are comprised of three components: symbols, attributes and associations. So much attention is focused on symbols--the logo, color and design. I get a bit irritated when someone tells me that their organization has a new brand and then proceeds to show me their new business cards with a new logo and colors. "Anything new about what the company believes in or any engagement with employees in a different brand promise"? I often ask. The answer is typically no, or a blank stare.

The real importance of brands is in their attributes and associations. We judge brands by whether or not the attributes meet our needs. We look at the associations brands have--whether other people "like us" are wearing or using the brand, and who the brand associates with. It is through engagement that brands become powerful, not through art and design. The symbols are there to highlight the attributes of the brand--they are not the brand.


Another mistake that companies make is that they think that the brand is differentiated with a cool name or by making bold claims of difference through marketing communications. You cannot spin a brand. It either has or does not have the desired attributes in the eyes of target customers. It is here that brands get their perceived value--why someone is willing to pay more for the brand vs. another product.

Consumer companies use what is called Unique Selling Proposition (USP) to differentiate what might otherwise be similar products. Toothpaste might all be the same, but some are whiteners, others have mouthwash, some have tarter control, etc. These subtle differences are designed to attract to the product those for whom these USP are important. They are not attracted to the ingredients, but rather to what the differentiated ingredients do for them to reduce risk of bad breath or yellow teeth. The USPs segment on the basis of psychological needs rather than functional ones.

For non-consumer products companies, differentiation can be found in what can be called Value Proposition. That is, the rationale for buying the product over another in the same competitive set. But, companies often mistake why someone buys the product. I was talking with a company that is trying to sell foam mattresses to hospitals. What's the value? They said it was weight, comfort, etc. The real value is that it eliminates bed sores, possibility of bed bugs, etc. Let's understand, though, that the marketplace of non-consumer products is very different from that of consumer products. That is, the needs of the customer are different, the competitive marketplace is different, and the sales engagement is different. Despite these differences, many non-consumer products companies follow consumer products principles in their branding activities. How can you make decisions about your brand strategies?

The best way is to look at the product from the outside-in, the way the customer sees it and to understand the needs and interests that determine the buying decision. I would suggest that there are two basic variables driving buying decisions: 1) the amount of fear, uncertainty and doubt (FUD) that the customer has in making the decision to buy; and 2) the complexity of the buying decision. Consumer products elicit little FUD and there is little complexity in the buying decision. If I want a Coke but the restaurant only sells Pepsi, there is little FUD or complexity. In contrast, if I am the CIO of a company buying 20,000 desktop computers for my company, there is a great deal of FUD and complexity. I could jeopardize or lose my job if my decision is wrong, and the decision may need the input of others who are more expert that I am. It helps for a company to draw a 2x2 matrix, with one axis being FUD and the other complexity, and to determine where their products and company value proposition lie. The more FUD and complexity, the greater the interest in corporate brand. The customer wants to know that the company behind the product is viable and strong. Consumer products have less need for corporate brand and focus on product brands. The same matrix can be used to determine the right marketing communications mix to support the branding decisions. Consumer products can be driven by advertising and marketing public relations. Non-consumer products brands need strong relationship management since they often build their brands at the point of sales.