Managing Dysfunctional Clients
Cut through the fog with a defined ROI
John Macario, President of Savatar speaks with Tamara Halbritter, PSJournal
The human body is much more streamlined than most companies. One brain sends messages to the many systems that keep the body healthy. It ensures the heart beats, the blood gets oxygenated, and predators such as bacteria are kept in check. It also decides when to seek outside help.
A business, however, is usually controlled by many brains communicating to several different business units or areas of the organization. These brains are the "strategists" or “thinkers” who send messages to the implementers or “doers.”
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In companies, a disconnect between the "thinkers" and "doers" occurs. Hierarchical organizations expect the brains to tell the organs and systems what to do. Period. They don’t realize the importance of two-way communication.
In the human model, separate body parts and systems communicate back to the brain regularly, especially, if they face a problem. Critical situations are flagged by a host of signals from the nervous system. Other systems communicate through symptoms such as asthma, leg pain, or a suspicious growth. Given this information, the brain problem-solves and directs the various internal and external troopers needed to bring the body back to optimal health.
John Macario, President of Savatar, says, “For many organizations, working in silos is counterproductive, whether these silos are different functional areas of the business or separate teams such as upper level managers and their technical staff. Companies don’t always understand the cost of poor communication between various parts of the organization.”
In the following interview, Macario provides insight into why this disconnect happens and gives remedies to help bring an organization back to optimal business health.
Q. Why does the disconnect between the “thinkers” and “doers” occur?
A. The primary driver is the siloed structure of most organizations. The hand-off from thinking to doing is not well orchestrated. One functional silo comes up with an idea and says to another, “Great, go put this into market.” The other one may recognize issues that have a strategic impact, but they consider them outside the scope of their responsibility despite the impact on program success.
Q. What problems does this present?
A. It’s hugely inefficient. This disconnect prohibits the market feedback mechanisms you need to efficiently orient your strategy. For example, lots of people belong to frequent flier programs. Every week, I get offers from various airlines hoping to tie my frequent flier membership to my telephone service (such as MCI & US AIR or Continental & AT&T). These partnership marketing programs are good ideas created at the highest level of the corporation. The strategists say, “Wonderful idea. Let’s turn it over to the operational people to go get customers.”
They turn it over to the "doers" who say, “Great, another marketing program with a telco partner. Well, we’ve done this before and know how to get it in market.”
Some people respond to the offer, others, like me, never do. Does anyone notice? I keep getting the offers and they keep spending the money to send them to me. The "doers" probably collect marketing program statistics, like the overall response rate, but aren’t looking at the cost of the program versus revenue generation, and reasons why individuals did not respond.
Based on my behavior (not responding) , the strategists should sweeten the deal, communicate another way, or stop making the offer because I’m not switching providers. The best way to figure out what the marketer can do differently is closer cooperation and shared learning between the "doers" and "thinkers."
Q. What can be improved on the “doer” side?
A. Many "doers" have a standard opinion about every new project, “Here comes the same brilliant idea again. You’ve got to be kidding me. This is not going to go well.”
First off, the doers need to be more involved in the planning process. Individuals from the doing team must be invited to share their thoughts with the thinkers during strategy sessions. This prevents final outcome disasters and allows learning from prior programs to be folding into strategy. It also gives the doers a chance to explain the complexity of the proposed project before it is carried out and fosters an appreciation of the nuances of good execution.
It is also the "doers'" responsibility to tell the "thinkers" about challenges such as creating a new field in a database in a way that ties to program success. Often "doers" use this kind of issue to advocate big investments in the latest and greatest technology. We’ve all heard it, “If we had just built that data warehouse, we wouldn’t have these kinds of problems.”
If an enormous investment, like a data warehouse, is required to fix a problem, it may be better to change strategy than invest in technology. People need to take an investment management approach that is focused on incremental returns. Many times the investment needed to fix a problem is modest and can be rolled into the program cost while still delivering an acceptable return.
Q. What can be improved on the “thinker” side?
A. People on the "thinking" side generally like the idea, but don’t know enough about the execution. They cannot make an educated decision about how to proceed most efficiently without knowing critical executional details. They must start to appreciate the complexity of getting programs to market.
In addition, they must follow a consistent approach in developing a strategy that sets credible expectations for market performance. Changing the rules of the game every time the "doers" are asked to execute a project makes it difficult for them to perform consistently. If the "thinkers" adopt a clear approach, no matter how simple-minded at first, and stick to it with a commitment to continuous improvement, the "doers" will perform more efficiently and predictably.
A consistent strategy development approach keeps everyone on the same page, helps foster mutual respect and generates enthusiasm. “We are here to make money, right? Our approach is designed to track ROI and help us improve in-market performance. Let’s go out and get some wins!”
Q. How does this impact your business as a consultant?
A. Everyone is asked to be more accountable in tight budget times. It doesn’t matter if your client is a government agency, a corporation, or a $3 million start-up. All companies want a defined ROI and to make a measurable impact with each project. This accountability goes back to you.
When you begin working with a client, it is important to be an advocate of “ROI thinking” whether you are working on the "doing" side or the "thinking" side. On either side, keep the conversation oriented around the fiscal impact of what you are about to do with your client.
For example, instead of just asking for budget, justify what improvements your client will reap from their investment. Deliver a strong vision of how they are going to get to their goal, i.e. last year, these 10 activities gave us a good ROI, so we’ll expand them this year; these five activities were iffy, but we learned from them, so next time around they will be more effective; these five activities bombed, so we do not recommend investing in them again.
As an industry expert, by ensuring your clients’ "thinkers" and "doers" communicate better, both you and your clients will stay on a healthy path to profit.
John Macario is President of Savatar, a strategy and technology consulting firm and subsidiary of London-based WPP Group (NASDAQ: WPPGY), a global communications services company with 55,000 employees in 92 countries.
Tamara Halbritter is a writer for InternetVIZ, and is available for freelance assignments. InternetVIZ is a custom publisher for companies wishing to find, acquire, and retain customers through Internet newsletters.
