March 23, 2017

Top 10 Problems I Observe In My Projects: #1

Problem #10 = New Items Are Too Expensive
Problem #9 = Discounts Drive Down Price Of Existing Winners
Problem #8 = Relying On 1-2 Customer Acquisition Channels
Problem #7 = Has To Be Right
Problem #6 = Seasonal Misalignment
Problem #5 = Email Clicks And Online Clicks Not Linked To Purchase Database
Problem #4 = Not Killing Existing Products
Problem #3 = Too Few New Customers
Problem #2 = Not Enough New Products
Problem #1 = Company Culture

I took a job at Eddie Bauer, back in December 1995. The marketing department was about half as big as the department I left at Lands' End. At Lands' End, we had a Director and a bunch of Managers. At Eddie Bauer, we had an EVP of Marketing and an SVP of Marketing and a DVP of Marketing and a couple of Directors and a bunch of Managers and a handful of Analysts.

At Lands' End, things "moved" ... decisions were made. I may have disagreed with the decisions, but there was progress.

At Eddie Bauer, there was one individual - a Manager, with considerable experience. And when decisions had to be made, this person got to "weigh in". Example - we were installing a new customer database. I wanted to pass customer intelligence to retail employees (this was 1997) ... new customer vs. existing customer, customer quality (loyal, lapsed), customer return rate (60% or 0%), that kind of thing. I made a fateful comment.

  • "We could recognize the customer as being new or loyal and then personalize the message or discount structure based on customer history."
Mind you - we offered different promotions to different customers online and in catalogs ... all the time.

The Manager looked at the room, face turning red, and with anger announced the following:
  • "That smacks of DISCRIMINATION. That's not who we are."
Well of course that was who we were ... we did it in catalogs/online all the time.

Heads nodded up and down, and my proposal to make retail point-of-sale systems "smart" died on the vine.

Then I noticed that when this person appeared in meetings, this person stalled progress. Whatever the progress was, this person said no. And the employees all got in line and did what this person told the room to do ... VPs did what this person wanted to do ... co-workers in other departments did what this person wanted to do.

I'd sit there and think to myself ... "This person has worked at this company for 25 years and has never been promoted above Manager and the company chooses to listen to this person instead of people who are actually paid to make decisions?"

This kind of behavior is flummoxing to a 30 year old.

More than twenty years later, this kind of behavior is not only common, but is behavior that should be studied at a University level.

Each company has an unofficial "Keeper of the Culture" ... in fact, each company has numerous "Keepers of the Culture" ... scattered across many departments. These individuals protect what has always been done. Their decisions save the company millions of dollars, preventing new employees from implementing risky initiatives.

Their decisions prevent the company from moving forward as well.

In 1998 at Eddie Bauer, I became the Director of Circulation/Analytics. I wanted all discounts/promotions removed - gone!

One of my Managers turned out to be a "Keeper of the Culture". I told my Manager to remove all discounts/promotions. He refused. "Oh, that's not what we do here." I told him to do it. He countered. "Sr. Management won't like this one bit. You're new to to the job, you have to learn how we do things." I reminded the employee that he reported to me. He sat silent. This should have been a sign that trouble was brewing. And when the SVP of Marketing told me to run the discounts/promotions, I again said no, sharing test results showing how unprofitable discounts/promotions were.

When the Manager brought the fiscal plan into my office with discounts/promotions, I reminded the Manager to remove them. He refused.

I then figured out what motivated this employee. This manager loved "the process" ... the process of applying the promotions and doing the math. So I made his life a bit easier ... I offered to do all the work and bypass him altogether ... he could author whatever plan he wanted but the rest of the company would follow my plan, and because I was his boss the company would have no choice but to work off of my plan.

The Manager was cut-off from his co-workers, from interacting with the rest of the company.

Later that week, the discounts/promotions disappeared.

Often, the "Keeper of the Culture" thrives on power. I've found that the "Keeper of the Culture" doesn't have a lot of org-chart power, even if s/he is a VP ... but has a lot of human power. A long history with the company. Knowledge of company processes. Good relationships with a handful of people who have power. A desire to change only when change comes from the person who keeps the culture.

Our job is to identify the real factors that motivate the person who keeps the culture. Take those factors away, and the person will change.

At Nordstrom, one of the "Keepers of the Culture" wanted all things to flow through her. And because she worked in the Information Technology department, all things had to flow through her. She didn't want change happening unless she initiated change. So whenever my team had new ideas or new ways of doing things, we allowed this person to get all the credit. This tactic enraged my team ... "she has nothing to do with this, why does she get the credit?".

By giving the "Keeper of the Culture" public credit for our work, the "Keeper of the Culture" implemented our agenda. She was happy. The company moved forward. And those who "mattered" knew where the ideas were coming from.

Find a way to take the power away from those who keep the culture.

Why do I bring this up?

Because when interact with you ... the most common refrain is this ... "Somebody will not let me do what I want to do, and that person is dumb and stupid." Sometimes the person is an Executive. Sometimes the person is a "Keeper of the Culture". Either way, the person is holding up the progress you want to make.

In the past decade, it has been my observation that we've lost the ability to manage our co-workers. Our data-driven approaches focus on metrics, not people. We work with outside vendors more than we work with in-house co-workers. We've lost our ability to convince people to change. When we lose the ability to argue with co-workers for change, we give power to the "Keeper of the Culture".

Out on Twitter, a follower asked why retailers won't change. "Isn't it obvious as retailers go bankrupt that they need to change? Why are they so stupid?"

Retailers (and catalogers) aren't stupid. Instead, both industries have ceded authority to the "Keeper of the Culture" (which amazingly can be members of the vendor community - yes, true story - they keep the culture of the industry intact for their benefit). When this individual (or team) has too much power, new ideas die and innovative employees leave the company, leaving a disproportionate skew toward those who are "Keepers of the Culture".

This is the number one problem I observe in my travels and interactions with you. Until we get good at shifting the power structure within our companies, nothing will change.


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