It is a blinding glimpse of the obvious that leadership of a company like Virgin is not the same as leadership of a company like ICI and it is likely that if the current leaders were to swap companies, they would probably both fail. Equally, leadership of a small start-up company requires different roles from those required for a mid-sized, ell established company.

Strong leadership is appropriate

Even a cursory glance at the research into the evolution of organisations indicates that at certain times, strong, centralised, directive behaviour is appropriate, whilst at others it is better to decentralise and leave things to people nearer the action. So, to have someone in charge of an organisation who uses democratic, consultative, behaviour, when strong, almost dictatorial behaviour is required, would be disastrous.

We have known for years what constitutes excellent leadership of sales forces, from the work of Semlow in the 1970s to the current research of Professor Nigel Piercy at Warwick Business School and research at Cranfield indicates that these characteristics are universal, irrespective of function or role. There is no point, then, in giving out lists of vapid words and phrases in an article of only 1000 words.

Examples of vague ill-defined terminology abounded for example, in papers on the required leadership characteristics for world class key account management (expressions such as ‘’orchestra conductor’, ‘team leader’, etc.) and it wasn’t until a proper catholic study was done on the topic by Dr. Sue Holt in a Cranfield PhD in 2003, that the precise role of a global account managers was defined.

This short piece, therefore, will instead concentrate on factors for success in marketing, irrespective of the size of the organisation.

The gurus and world class marketing

The world’s greatest gurus, such as the Chairman of Unilever, Philip Kotler, Tom Peters et al are all agree that world class marketing consists of the following:

The top five are highlighted because they are at the top of everyone’s list and because ‘institutionalised creativity and innovation’, as an example, is pointless without proper strategic direction.

Wise words from a poet

As Alexander Pope said:

“Fixed like a plant on his peculiar spot,
To draw nutrition, propagate and rot,
Or meteor-like, flame lawless through the void,
Destroying others, by himself destroyed”.

God defend us from Chief Executives who haven’t the faintest idea what customer-orientated differential advantage is, who start decentralised creativity campaigns! Where on earth is the leadership in such behaviour! One lunatic Chief Executive – who had probably been on a course somewhere, or who had probably read Tom Peters book ‘In Search of Excellence’ (remember, eight years later there were only six of the original 43 so-called excellent companies left who were anything remotely resembling ‘excellence’) – rewarded his people by insisting they all get 15 per cent of their revenue and profits each year from ‘new’ products or markets. The result? Everyone took their eye off existing business and they went bankrupt!

The answer, of course, as in the case of all long-term outstanding companies like Tesco, 3M, British Oxygen, Proctor and Gamble, etc., is excellent marketing. We do not include in our list banks, oil companies and the like, whose spectacular success is mainly due to growth, quasi-monopolistic markets. In excellent companies, market and customer needs dominate corporate policy. The author spends much of his time with the operating boards of companies. He always starts with the following questions:

• Can you list your key target markets? (in order of priority)
• Can you describe (quantitatively and qualitatively) the value that is required by each of your key target markets?
• Is what your company does superior in any way?
• In each of these key target markets, can you describe how your organisation creates superior value?
• Do the relevant senior people in your organisation understand and support the above three points?
• Are all the relevant functions in your company organised in a way that is supportive of delivering the value required by the customer?

It is amazing how many directors can’t even answer the first question and those who do invariably write down their products, such as middleware, pensions, computers, etc. Any fool knows what their products are, but it is often too difficult for them to list in any meaningful way their key target markets. From that point on, it is obvious that it is pointless trying to elicit sensible answers to the other questions.

Two tables are shown below for a real company (disguised for reasons of confidentiality). The first indicates a fabulously successful company, but even a cursory glance at the second shows that they are losing their position in the market quite dramatically and the moment this high growth market matures, this company will flounder.

Lest there is any doubt remaining about short-term success and financial husbandry, bear in mind that Britain’s highest performing companies in the decade up to 1990 subsequently failed, whilst the performance of the top performing companies in many sectors up to 2000 also subsequently failed (companies such as Maxwell, Marconi and Marks and Spencer).

However, enough of this criticism (for evidence, please see ‘Marketing Existential Malpractice by Malcolm McDonald. Journal of Marketing Management, vol 3-4,April 2004 (pp 387-408 )

In over 40 years of practice, research and teaching in the domain of marketing, the author offers the following ten guidelines for marketing excellence, irrespective of size of organisation or stage of development.

1. Understand Customer Orientation

2. Understand the sources of competitive advantage

3. Understand The Environment (opportunities and threats)

4. Understand Competitors

5. Understand market segmentation

6. Understand your own strengths and weaknesses

7. Understand the dynamics of product/market evolution (product life cycle analysis)

8. Understand your Portfolio of Products and Markets

A deep understanding of portfolio analysis will enable you to set appropriate objectives and allocate resources effectively. Portfolio logic arrays competitive position against market attractiveness in a matrix form.

Box 1 Maintain and manage for sustained earnings
Box 2 Invest and build for growth
Box 3 Selectively invest
Box 4 Manage for cash

9. Set Clear Strategic Priorities and Stick to Them

10. Be Professional

Finally, give leadership.

Do not let doom and gloom pervade your thinking. The hostile environment provides many opportunities for leaders with toughness and insight. Lead your team strongly and do not accept poor performance in the most critical parts of the business.

Charismatic leadership, however, without these ten pillars of success, will be to no avail. Charisma, without something to sell that the market values, will ultimately be pointless. It is, however, still an important ingredient of leadership.

By Professor Malcolm McDonald

Email: m.mcdonald@cranfield.ac.uk
Web: http://www.cranfield.ac.uk