People, too, Can Eat Strategy for Breakfast

Culture eats strategy for breakfast.  Attributed to the management guru Peter Drucker, the line became popular in the middle of the last decade when Mark Fields, President of the Ford Motor Company, posted it in his war room.  The company’s culture warranted sustained attention from his leadership team, Fields was saying, otherwise it could make their strategic planning and priorities meaningless.  Even more fundamentally, implicit in Fields’ posting was the message that leaders could address and actively shape their organizational culture for the better. 

How to foster that strong, positive and creative culture has always been the real question.  Changing beliefs, changing behaviors, and providing common goals are among the general approaches that leaders have adopted when wanting to create a culture in specific contexts.  Yet all of these must begin, quite simply, with the people in a team or organization – and it is often in leading those people, and the talent they bring, that the strongest and most creative cultures are built.

I recently had the opportunity, with the Berlin School Executive MBA program, to visit an outstanding example of talent leadership: the UFA Lab – a Content Lab based in Berlin and also in Cologne.  The Lab is part of UFA, one of Germany’s oldest and most distinguished entertainment brands, with an artistic heritage of films. UFA is part of FremantleMedia, represents a group of dynamic production companies, and is owned by the conglomerate Bertelsmann. 

The Lab retains exceptional autonomy, however, to pursue revenue-neutral projects and enter into imaginative partnerships to explore opportunities and innovation in the shifting digital media and communications marketplace.  Indeed, as the following graphic makes clear, the Lab has emerged over the last three years as a platform for the digital entertainment industry, developing interactive entertainment with some of the most creative organizations in the world, including YouTube/Google, Apple and Nintendo, as well as German start-ups like Couchfunk and movinary.

The outcomes of such collaboration have included a host of innovative new media projects, productions, and events.  Consider Rescue Dina Foxx!, a transmedia project joining broadcast television drama with online video content and gaming to produce an interactive captivating thriller for audiences to solve. Produced with German broadcaster ZDF and teamWorx in 2011, the carefully designed project generated both actual and online communities to investigate a fictional murder.  While an engrossing and interactive thriller, the project also smartly employed multiple media tools and platforms to explore with viewer-participants contemporary issues around digital identity theft. It’s Germany’s biggest-ever alternate reality game. Watch the full trailer.

While the UFA Lab has leveraged its place within Bertelsmann to forge imaginative collaborations with major global partners and to pioneer innovative media and entertainment productions, other drivers of their success are more human scale.  Speaking to Jens-Uwe Bornemann, the UFA Vice President Digital Ventures & Innovation who founded and leads the UFA Lab, and some of his senior producers, it quickly becomes evident how crucial to the Lab’s success have been the personal interactions in the space on Mehringdamm in Berlin’s Kreuzberg neighborhood, in Cologne, and through individual connections beyond, including in London and New York.  One of the clear takeaways of a visit, in fact, is that Bornemann’s flexible project-based business design and open leadership of such diverse and cross-functional talent, who often reside in different sites and sometimes organizations, have been indispensable to the UFA Lab’s consistent creative productivity.

Legendary adman Jay Chiat once famously said, “How big do we get before we get bad?”  That is still a useful maxim for many agencies and firms wanting to remain nimble and adaptable.  More recently, a current legend, R/GA’s Bob Greenberg, offered the following variation: “How diverse are we going to get before we get good?”  Such recognition of the power, even necessity, of successfully deploying diverse talent marks a critical priority for leaders of creative production, teams and wider communities today. 

Diversity, of course, is about people and their different experiences and outlooks, ideas and perspectives.  It’s also about how leaders guide those people toward shared goals.  Culture, after all, is crucially about people and the values, beliefs, and goals they share.  Effective leadership, like that of the UFA Lab, continually enables and inspires people by envisioning the opportunities that those with shared belief and collective effort can explore and achieve.  Without such leadership and its catalyzing effects, diverse talent can remain dispersed, disorganized, and chaotic.

Culture still eats strategy for breakfast.  But so can people, particularly in creative businesses, if they are not empowered to pursue shared priorities and achieve common goals.  With the increasing diversity of talent brought to bear today in teams, projects and organizations, there’s perhaps no greater challenge – and opportunity – for creative leaders than to enable and inspire their people. 

Beyond Numbers of Doom: Effects of Film #Piracy, including Economic Benefits, Industry Re-structuring, and #Creativity?

Two fascinating pieces by @CarlBialik about efforts to better understand the effects of film piracy appeared in yesterday's Wall Street Journal.  

"Studios Struggle for Focus on Film Pirates' Booty," details how film studios, primarily through its industry association, the MPAA, is working to update the research basis of their insistent claims of the harmful effects of film piracy on the industry.  In recent years, the conclusions of two 2006 studies that estimated roughly $6.1 billion was being lost by the industry (and $20.5 billion lost by the overall U.S. economy) annually to piracy have been repeated and even used with multipliers to generate larger subsequent estimated losses.  The MPAA is pulling back from citing that number and seeking to collaborate with researchers, many academic, to assess more accurately the complex effects of piracy.  This is a welcome if guarded step by the industry, particularly in that it includes sharing some internal data with outside researchers.

"Putting a Price Tag on Film Piracy" is a separate blog post in the Journal by the same author, Bialik (their Numbers Guy).  In it, he delves more deeply into some of the challenges of trying to fix a single number to capture the effects of piracy on the industry.  These include the rapidly changing film and wider entertainment marketplace, the notoriously secretive nature of industry financial reporting, and the elusively varied practices of piracy itself.  Not surprisingly, identifying the financial costs of piracy remain the primary objective of much of this research.

Yet at the end of the blog post, several other "related research questions" are identified.  In many ways, looking ahead and more broadly, these have the potential to produce much more revealing insights.  For Bialik, they are:

• Potential economic benefits, such as boosting other industries like broadband or creating buzz around traditional film box office
• The relative success, or its lack, of efforts to mitigate piracy
• The effects of piracy on the supply of creative work

Without unduly embracing piracy, the first and third of these questions raise an important -- if, for the industry, unsettling -- possibility: namely, that there may be more to piracy than the MPAA allows in discussing the issue only in terms of declining revenues.  Underpinning both is the new reality, really the new media and entertainment eco-system, in which film is situated.  More research about the future of film and possible business models for film companies is crucial, and some would argue that it is pirates who are, in fact, most actively exploring those futures.  The relationship between piracy and creativity, especially, deserves more attention in a world where innovative productions and delivery strategies are celebrated (and later often co-opted by the industry).  Hopefully the industry will move beyond its halting steps and engage in more open-ended research on its own future -- a future, as it happens, that includes potentially far-reaching new opportunities that have been illuminated by pirates but that the industry itself could lead.

The Leader’s Guide to Building an Everyday Strategic Practice: Lafley and Martin's 'Playing to Win'

A.G. Lafley and Roger L. Martin, Playing to Win: How Strategy Really Works, Cambridge: Harvard Business Review Press, 2013.

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A.G. Lafley, CEO of Procter & Gamble from 2000-2009, is one of the most-respected and successful corporate leaders of the young twenty-first century.  Roger Martin, a long-time business consultant and currently Dean of the Rotman School of Management in Toronto, is among today’s most original and prolific management thinkers.  Having worked together for nearly three decades, the pair have written a book arguing that “strategy really works” through the development and practice of ongoing strategic leadership rather than the application of specific frameworks, analyses or best practices.

That said, Playing to Win does advance its own original model, which involves answering  five key questions:

     1.  What is your winning aspiration? 

          (The purpose and motivating objectives, financial and non-financial, of your enterprise.) 

     

     2.  Where will you play?  

          (The playing field – geographies, product categories, consumer segments, channels, vertical stages of production – where you can achieve this aspiration.)

     3.  How will you win?  

          (The way you will win on the chosen playing field or market -- your value proposition, profit models, partnerships, or competitive advantage.

     4.  What capabilities must be in place?  

          (The set and specific configuration of distinctive capabilities and reinforcing activities required for you to win in the chosen way.)

     5.  What management systems are required?  

          (The systems, structures and measures that enable your capabilities and support your choices.)

These steps and questions are interconnected, cascading into and reinforcing each other as visualized below:

Lafley and Martin nicely demonstrate how each of these questions can be answered and linked, mostly using examples from P&G like the creation of the new market category called “masstige” for the re-launch of Oil of Olay in 2000.  They mount a compelling and always accessible argument that includes a very helpful “logic” flow of sub-questions to help users make better decisions about each of the five major questions.  In doing so, they underscore how theirs is less an analytical than a process model, less about analysis or vision-formation or priority-setting and more about enabling continuous strategic thinking and decision-making. 

This is an essential insight because it shifts strategy from being about a static plan or analysis to being more about an ongoing process.  Put differently, the book emphasizes strategic management or leadership rather than a one-dimensional approach to strategic plan-making or priority-fixing like the BCG matrix or Michael Porter’s Five Forces (which makes an appearance here).  While such tools are important for assessing point-in-time conditions, Lafley and Martin focus on how they are really means to developing an everyday way of strategic thinking and acting. 

It is in that focus that Playing to Win becomes as much a leadership as a strategy handbook.  If the process model rolled out in the book is ultimately “an integrated cascade of choices,” both the strategic value of the choices and the motivations and drivers of those making the choices share emphasis here.   Repeatedly, the articulation of how the five questions can be answered is couched in some of any leader’s fundamental challenges and responsibilities: knowledge and information management, communications, decision-making.  Far-reaching and robust strategic analysis is a crucial part of that process but should finally be relegated to serve the leader’s wider obligations.  As a result, the leadership thinking celebrated here is integrated, disciplined and courageous, in part because it never grows too removed from decisive action. 

Yet one of the issues that arises in approaching the book as a guide for leaders concerns the potential wider applicability of lessons and insights that are mostly drawn from P&G.  With its scale, diversity and resources, one wonders about the relevance of the approach to strategic leadership to different types of businesses.  Lafley and Martin do cite other examples throughout, but they tend (think Apple, Google, or General Motors) to be similarly outsized compared to most businesses.  While no one size fits all, of course, some of the guiding assumptions here would be well-tested by smaller and creative firms.  There’s also the further, fascinating question of whether the rapidly changing relationship between firm and customer, client or public is more varied than assumptions grounded in P&G’s consumer goods markets allow.   

Upon reflection, the emphasis on strategic leadership thinking and action seems mostly quite promising for businesses of diverse sizes and market orientations.  For creative organizations, in particular, the centrality of creative talent and the aspiration to creative excellence can often make the requisite assessments of capabilities and systems more challenging.  In ways, though, that very need can be seen to recommend the embrace of more robust and ongoing strategic thinking and action outlined here.  “There is simply no one perfect strategy that will last for all time,” Lafley and Martin write.  “That’s why building up strategic thinking capability … is so vital.” 

Reading these lines brought to mind a memorable presentation I had attended in 2011.  At the Cannes Lions festival that year, the leadership of the award-winning and always forward-looking creative agency, R/GA, was recounting its history and also describing the thoroughgoing strategic review and re-organization it conducts every nine years (http://www.rga.com/about/featured/the-next-nine-years).  The review by Bob Greenberg and his team is certainly done in planned cycles.  A crucial takeaway from the presentation, however, is that these cyclical re-organizations are merely the most conspicuous outcomes of a thoughtfully developed and decisive strategic leadership capability that has proven enormously successful in creative communications.

A.G. Lafley is a renowned and passionate believer in deep customer understanding.  He nevertheless recognizes the limits of uncovering knowledge of shoppers and other end-users.  As he has observed elsewhere, “Customer research doesn’t tell you the answer. It is only an aid to judgment.”   That approach is also a good way to think more generally about Playing to Win.  While we can embrace the fundamental importance of strategic models and practices – even Lafley and Martin’s own – such knowledge must finally be less an end in itself than an aid contributing to a broader leadership practice driven by everyday engagement with purposeful prioritization, communications, and decision-making.