Taivas Business Design is about creating NEW business based on customer Nov. 10, 2009
A Manifesto for Social Business
By Graham Hill, Customers & More
The nature of business is inexorably changing. The changes are being driven by a number of factors: ranging from the need to compete differently after the recession, through the availability of huge volumes of new information, to the rapidly growing influence of social customers.
I would almost go as far to say that we are fast approaching a period of ‘Business Enlightenment', based not so much on the linear thinking that drove the Enlightenment in the 18th Century, as on networked, emergent thinking which is driving so much new thinking in the 21st.
Many different themes are coming together and new business models are emerging from where they meet and mutually reinforce each other. Together, they have the potential to change many aspects of what we call business today. They have the potential to create a new kind of Social Business, driven not so much for social purposes as by social relationships. Many companies are already experimenting with these themes, some companies with a number of them. Although no companies are experimenting with all of them yet, it is only a matter of time.
Here are the fifteen themes (the Manifesto) driving Social Business:
No1. From Individual Customers… to Networks of Customers
The emphasis for business today is still on managing customers as individuals. But we have evolved as social animals with highly developed and highly influential social networks. For example, research by Christakis & Fowler suggests that we are highly influenced by three degrees of influence – friends, friends’ friends and friends’ friends’ friends. It’s not about ‘influencers’ per se, but the social networks in which influence happens. If we are to be successful in Social Business we must recognise the power of customers’ social networks to shape customers’ behaviour.
No2. From Customer Needs, Wants & Expectations… to Customer Jobs-to-be-Done
For years we have struggled with the psychobabble generated by trying to understand customers needs, wants and expectations. Customers know what they are trying to do but codifying this has baffled market researchers and cost companies millions in failed new products. Recently, Tony Ulwick has shown how looking at the jobs customers are trying to do and the outcomes they are trying to achieve, can cut through the psychobabble and provide a foundation for innovation. If we are to be successful in Social Business we must start to understand the jobs customers are trying to do and how we can help them do the jobs better.
No3. From Company Value-in-Exchange… to Customer Value-in-Use
The dominant model in business today is based on value-in-exchange. The company sells products in exchange for the customer’s money. There is obviously value in exchange for the company, but not much value for the customer. Customers only create value when they use the products in the days, months or even years of the product’s lifecycle. Think of buying a new car. Customers create value over many years of happy motoring. But the carmakers pretty much abandon the customer (to their dealers) immediately after the sale. If we are to be successful in Social Business we must understand how customers use products to get jobs done throughout the lifecycle of the product.
No4. From Delivering Value to Customers... to Co-Creating Value with Customers
In the value-in-exchange model, companies embed value in their products and then try and find willing buyers. Value is delivered at the point of sale. But as we have seen, value for customers is co-created when customers use the products to help them do jobs more effectively. The product is a means for the customer to co-create value. If we are to be successful in Social Business we must understand how customers use products to help them do jobs and to embed the collected knowledge, skills and experience in the products themselves so that customers can co-create more value-in-use.
No5. From Marketing, Sales & Service Touchpoints… to the End-to-End Customer Experience
Traditional CRM is based largely on the marketing, sales and service touchpoints. But customers see many more touchpoints, in particular, they see the many touchpoints as they use products to help them do jobs. CEM has extended CRM to include all the touchpoints in the end-to-end customer experience. But far too much CEM is about the company’s brands rather than about customers. It is a step in the right direction but it doesn’t go far enough. It isn’t about how customer co-create value. If we are to be successful in Social Business we must understand all the touchpoints important to customers and how we can help customers co-create more value during the touchpoints.
No6. From One-Size-Fits-All Products… to a Long-Tail of Mass-Customised Solutions
Most companies still make a limited range of products and then try and find willing buyers. Many companies have gone beyond this simple model by bundling a range of complementary products, information and services. But as anyone looking for a new mobile telecom plan knows, the bundles never give you exactly what you want without bankrupting you in the process. Some companies, like Turkey’s Garanti have started to offer customers modular products they can mass-customise for themselves. Their Flexi credit card offers 9,000 different variations through only 19 easy to customise options. If we are to be successful in Social Business we must modularise products and provide simple configuration tools to allow customers to create just the right solution at the touch of a button.
No7. From Competing on Products, Price or Service… to Competing over Multi-sided Platforms
The Delta Model tells us that companies should compete based on innovative new products, keener pricing or superior service. This approach has served companies well in the past 20 years. But new advances in business models, in particular, the growth of multi-sided markets like credit cards, internet retailing and more recently, the Apple iPhone application store has changed whole industries. Multi-sided markets allow thousands of sellers to trade with millions of buyers who normally would never meet each other. If we are to be successful in Social Business we must provide multi-sided platforms over which customers can trade with our companies and a whole ecosystem of partners.
No8. From Company Push… to Sensing and Responding in Real-Time to Customers
As we have seen, most companies still operate using a push model. Products are made and then marketed and sold to willing buyers. That works fine when most customers want what your company has to offer. Or if there isn’t any real competition. But today’s customers are no longer willing to accept products that don’t exactly match their needs. Companies like Capital One and Tesco have used the power of customer analytics to offer the right products to thousands of dynamic customer micro-segments. Capital One reputedly carries out over 50,000 such marketing experiments every year. If we are to be successful in Social Business we must learn to sense and respond to the changes in behaviour of small groups of customers in almost real-time.
No9. From Technology, Processes & Culture… to Complementary Capabilities and Micro-Foundations
Most companies recognise that it is no good just installing new technology and expecting things to get better. As we used to say in PwC’s Change Practice, Old Organisation + New Technology = Expensive Old Organisation. Today, companies look to a basket of technologies, processes and people to plan business improvements. But this isn’t enough. We need to look deep into the nuts and bolts of our companies to understand the complementary capabilities and micro-foundations that drive success. And in today’s networked environment, that may mean understanding partners and even customers’ capabilities too. If we are to be successful in Social Business we must really understand what drives success in our companies and our network of partners, not just use simplistic improvement models and hope for the best.
No10. From Made by Companies for Customers... to Made By Customers for Each Other
Companies exist as they are more efficient at providing what customers need than either markets or other customers; they have lower transaction costs. But the Internet is slowly chipping away at these transaction costs and is enabling new ways of transacting. Customers can now transact directly with other customers, often at a lower cost than going through a traditional company. As the success of peer-to-peer bank Zopa shows, customers can now do business with each other directly, cutting out the expensive middleman. If we are to be successful in Social Business we must ensure that our companies are not in danger of being cut-out of the equation as customers start to deal directly with each other. Or to adopt, e.g. a multi-sided platform business model if we are.
No11. From On-premise Applications… to On-demand Solutions from the Cloud
As companies recognise that yesterday’s complicated approach to business won’t work in tomorrow’s complex environment, they must adapt or die. Part of the adaptation is moving away from suites of all-singing, all-dancing on-premise applications to solution clouds of integrated on-demand applications. Although this is still very much work in progress, it should be clear that only on-demand solutions through the cloud will give companies the flexibility they need to cope with emerging changes to the business environment. If we are to be successful in Social Business we must have access to use just enough on-demand applications delivered through the cloud to respond to changing market conditions.
No12. From Stand-alone Companies… to an Ecosystem of Networked Partners
Most companies still only work with a limited number of partners. But these times are changing. As customers increasingly demand complete solutions to help them do their jobs, companies are forced to work together with a network of partners to provide exactly what customers need. For example, Procter & Gamble’s Connect & Develop programme allows it to partner with thousands of potential partners to deliver better solutions for customers. If we are to be successful in Social Business we must identify the partners we need to deliver better solutions for customers and learn how to partner with them for mutual advantage.
No13. From Hierarchical Command & Control… to Collaborative Hybrid Organisations
When companies are organised to minimise transaction costs, it usually leads to a hierarchical, command & control approach to organisation. This is fine if companies want to operate as efficiently as possible in an unchanging environment. But if the environment is continuously changing, companies cannot sense and respond quickly enough if they are organised in this way. To make sense of changing environments, companies need a flexible, network-based organisation that can work together with customers to identify and respond in real-time to their needs. The answer to these apparently conflicting ways of organising is to create hybrid organisations that combine the best of both worlds. If we are to be successful in Social Business we must create collaborative hybrid organisations that combines the efficiency of command & control with the flexibility of networks.
No14. From Customer Strategy… to a Portfolio of Emergent Customer Options
In an unchanging world companies should formulate customer strategies that allow them to make the best of their limited resources. But in the continuously changing world we find ourselves in today, that just creates problems as plans quickly become out of date. As McKinsey’s Eric Beinhocker points out in his book The Origin of Wealth that means creating a portfolio of customer options with which to respond to customers’ emerging behaviour. And as we have seen, today’s social customers are highly influenced by what their friends do. Their behaviour is highly emergent. If we are to be successful in Social Business we must create a portfolio of customer options with which to respond to changes in customer behaviour.
No15. From Customer Lifetime Value… to Customer Network Value -
Customer lifetime value is based on the customer as a purchasing island. But as we have seen already, the customer is highly influenced by friends, friends’ friends and friends’ friends’ friends, and in return, influences then back. This led to the development of Customer Referral Value as a way to measure these influence networks. But that isn’t enough. As I pointed out in an earlier blog post on Take Three Bites at the Customer Value Cherry customer networks by dint of their ability to attract other customers and sellers has a value over and above the customers’ referral value. If we are to be successful in Social Business we must understand how customers, their referrals and the customer network as a whole creates value for companies.
are not meant to be the final word on the subject. Rather, they are meant to provide a framework to start to think about social business in a structured way and at the same time, a catalyst to stimulate everyone else’s own thinking on Social Business.
Social Business is too important to leave to individuals or individual companies to decide. It is SOCIAL Business after all. That means everyone with an original thought should feel free to add to the many conversations now spring-up on Twitter, Googlewave and elsewhere.
As Alan Kay famously said, “The best way to predict the future is to invent it”. Let’s get inventing.
Graham Hill
Customer-centric Innovator
Graham Hill is the founder of customer management consultancy Customers & More. He has more than 20 years of experience in customer-driven change programs with companies of all shapes and sizes. He can be contacted at graham(dot)hill(at)web(dot)de. [Blog: Customer Insider]
World's Best Design Programs - BusinessWeek
The 20th century was all about the growth of corporations, pushing products and services to customers, developing top-down management and, in the latter quarter, developing computerised processes to do this more efficiently through centralised systems. Some of those systems worked well some of the time for some of the people (guess which!); many have failed dismally; all were costly.
Social business design is about redesigning those structures and processes to deliver solutions that people actually want, not what the corporation thinks they should have. It is about connecting and engaging with - indeed exploiting (but in the nicest possible way) - those who matter to the business: customers and employees. Success is possible today with very modest investment in systems and software - most of it nowadays is free or all-but; all that’s needed is the need and enthusiasm of the end-users who willingly put in most of the grunt work.
Kalastusta Töölönlahden rannassa vuonna 1890. Taustalla
Kaisaniemi. Kuva K. E. Ståhlberg, Helsingin kaupunginmuseo.
"Töölönlahti on merenlahti Helsingissä ydinkeskustan pohjoispuolella. Töölönlahti on yhteydessä avomereen Kruunuvuorenselältä alkavan kapean salmen kautta. Töölönlahden länsirannalla sijaitsevat Suomen kansallisooppera ja Finlandia-talo sekä Hesperian puisto. Itärannalla on Linnunlaulun huvila-alue. Töölönlahtea ympäröi joka puolelta yhteensä 2,2 kilometrin pituinen jalankulku- ja pyörätie. Kesäisin keskellä Töölönlahtea toimii suihkulähde.” (Lähde mukaellen: Wikipedia)
Organisaatio kehittyy aikaa myöten erilaisista liiketoiminnoista joko huolellisen suunnittelun tai sattumien kautta. Liiketoiminnoista muotoutuu aikaa myöten monipuolinen ekonominen kokonaisuus. Tavoitteena ovat taloudellinen menestys ja henkinen hyvinvointi. Toimintaympäristön muutos aiheuttaa kuitenkin jatkuvaa sisäistä muutostarvetta liiketoimintoihin.
”Kun Helsingin kaupunki perustettiin nykyiselle paikalleen 1640-luvulla, Töölönlahteen johtava salmi oli jo soistunut umpeen kapeimmasta kohdastaan. 1800-luvun aikana matala ja mutainen Kluuvinlahti täytettiin ja otettiin rakennuskäyttöön. Pasilan Töölönjärvi kuivattiin 1870-luvulla, jolloin myös Töölönjoen virtaus ehtyi. Töölönlahti on rehevöitynyt jo 1700-luvulta lähtien johtuen veden vähäisestä vaihtuvuudesta.” (Lähde mukaellen: Wikipedia)
Liiketoiminta voi joutua henkisen kuivumisen tai soistumisen tilaan, jossa sisäiseen uudistumiseen tarvittavat virtaukset puuttuvat. Runsaistakaan ideoista ei koskaan synny uutta liiketoimintaa, toimintamalleja, tuotteita tai palveluita. Organisaatioon tulee matalikkoja ja rehevöitymistä, joissa uudenlaista ajattelua ja ajattelijaa vaanivat monenlaiset vaarat. Ilmiö on voimakkaimmillaan laskusuhdanteessa, jossa uudenlaisia innovaatioita erityisen kipeästi tarvittaisiin.
Töölönlahden rehevöitymiseen on kuitenkin alettu hakea muutosta lisämäällä veden vaihtuvuutta tuottamalla Humallahdelta putken kautta puhtaampaa vettä Töölönlahteen.”(Lähde mukaellen: Helsingin Kaupunki)
Yksi tervehtymisen keino on lisätä henkistä virtausta organisaatiossa. Ideoita on helppo löytää esimerkiksi osallistamalla asiakkaat liiketoiminnan, tuotteiden tai palveluiden kehittämiseen ja jopa lanseeraamiseen. Organisaation tehtävänä on koota innovaatiot, poistaa uudistumisen esteet ja luoda prosessit innovaatioiden kaupallistamiseen. Valitettavasti on huomattavasti helpompaa ja yleisempää heitellä ideoita otamatta niistä kehitysvastuuta tai ampua niitä alas, kuin kaupallistaa niitä taloudellista hyötyä tuottavaksi.
”Juoksutuksen vaikutuksesta Töölönlahden veden laatu on parantunut. Levien sekä ravinteiden määrät ovat vähentyneet ja veden sameus on pienentynyt. Uposvesikasvillisuuden määrä näyttäisi lisääntyneen. Meriveden juoksutuksen kokonaisvaikutukset näyttäisivät olevan positiivisia, minkä vuoksi kunnostusta suositellaankin jatkettavaksi.” (Lähde mukaellen: Helsingin Kaupunki)
Samoin kuin Töölönlahti, on moni organisaatio pystynyt uudistamaan liiketoimintaansa merkittävästi asiakkaiden avulla erinomaisin tuloksin.
Esa Saarelainen
Toimitusjohtaja
Taivas Business Design
Last year, Unilever grew the top line 7% organically, but all from pricing.
"This year the growth is coming from innovations and [marketing]," Mr. Polman said. "That's quality growth."
Unilever ja muutamat suuret todelliset bränditalot pitävät päättäväisesti lama-aikojen läpi markkinointipanostukset korkealla. Vanha viisaus on, että kun muut ovat hiljaa, on medianäkyyvs, share-of-voice ja huomioarvo share-of-mind, suhteellisen ja absoluuttisen halpaa.
Kasvua voi saada aikaan myös hinnoittelulla, volyymiä alennuksilla ja lisätuottoja monopolialoilla nostamalla hintoja.
Innovaatioilla ja markkinoinnilla aikaansaatu LAATUKASVU on innostava business design -näkökulma, -tavoite ja -käsite, jonka otan käyttöön heti tänään.
TORONTO (August 13, 2009) - Far too many of those mailings, emails and Facebook messages that companies send to their loyalty reward program members miss the mark, according to consumer survey research released today by customer loyalty agency Direct Antidote, a LoyaltyOne company.
Just 32% of U.S. consumers rated reward program communications 8 or higher on a 1 to 10 scale for measuring relevancy to their personal needs - with 68% giving a score of 7 or below. The Direct Antidote research is based on 2,152 completed surveys from consumers nationwide.
Direct Antidote's study centered on loyalty rewards communications, such as annual points balance reports, special earning offers and program information. Consumers were asked to rank the relevance of the communications they receive from "not at all relevant" to "extremely relevant" on a 1 to 10 scale. Despite marketers devotion to customized messaging, Direct Antidote's results across all demographics surveyed showed decidedly average relevance scores, with Seniors reporting the lowest perceived relevance at a 5.7 mean score, and Young Adults and Hispanics tied for the highest at 6.9.
"We are in the era of enhanced customer expectations, where the empowered consumer has a strong desire for engagement. And clearly the loyalty industry is falling short on delivering the highly-personalized, relevant communications that consumers expect," said Di Cullen, president of Direct Antidote.
"The data offers an opportunity for loyalty marketers to step up on several fronts," continued Cullen. Cullen cited the following strategies to improve communication relevance:
Practicing what it preaches, Direct Antidote recently launched a campaign for Canadian loyalty program operator, the AIR MILES Reward Program, in an attempt to improve relevance and consumer response rates. The firm created an unprecedented 778,000 unique versions of an account statement mailed to over three million members. Early tests yielded a more than 100% boost in response rates and a very green-friendly 40% reduction in paper waste.
In another key finding from the study, the Senior demographic reported a spike in engagement with rewards programs since the same questions were asked in 2007. Over the two-year period the amount of Seniors that reported reading special offers sent via mail increased 64%; the amount saying that they read mailed statements was up 21%; and the amount responding to member surveys increased 21%.
At the other end of the spectrum, the survey found Young Adults or Millennials outpacing all demographics in appreciation of engagement with rewards programs through new media. A somewhat expected but still notable 52% of Millennials strongly appreciate communication via cell phone or text message and 55% said the same about social networking sites. This compares with the General Population at 38% and 39%, respectively.
"The stats are indicators that the loyalty business enjoys appeal across the span of demographics. As Baby Boomers move from workforce to retirement, there is great opportunity to engage these veteran loyalty players with communications that appeal to their new lifestyle. At the polar opposite, fostering engaged, loyal customers within the Young Adult demo means approaching them on emerging channels," concluded Cullen.
Direct Antidote's research was gathered in coordination with loyalty marketing publisher COLLOQUY. The study of loyalty program perceptions examined trends in six consumer segments: General Population representing a statistically distributed sample of the U.S. overall; Affluent (heads of household with annual incomes of $125,000 or greater); Millennials or Young Adults (any respondent 18 to 25 years of age); Seniors (any respondent 60 years or older); Core Women (any female respondent age 25 to 49 with an annual income between $50,000 and $125,000); and Emerging Hispanic (any respondent age 21 or older of Hispanic origin with an annual household income of $40,000 or less). April 2009 online survey respondents are broadly representative of the U.S. population within each consumer segment. The research obtained a total of 2,152 completed survey interviews.
”Uudet bisnekset eivät enää ole sivussa yritysten ytimestä”, McGrath sanoo.
Kun nykyinen ydinbisnes ennen pitkää hyytyy, tilalle pitäisi olla tiedossa
useita vaihtoehtoja. Uusi menestysbisnes löytyy harvoin yrityksen nykyisen
ydinbisneksen tontilta.
Apple Beats Windows In Customer Experience « Customer Experience Matters
- Aggressively restructuring to operate profitably at the current demand and changing model mix
- Accelerating development of new products our customers want and value
- Financing our plan and improving our balance sheet
- Working together effectively as one team
When do we plan to do this?
It's already under way.
During the past three years, we have switched to a lineup that includes many new cars and crossovers. They've been proven to match the quality of the imports,1 along with enhanced safety, better fuel mileage, and innovative technology.
You'll be glad to know Ford has been making great progress ... we're sure you will agree.
- Ford Motor Company, Honda Motors and Toyota Motors quality ratings are in a dead heat.1
- Our cars, trucks and SUVs deliver fuel economy that's competitive with that of all other automakers.2
- Fifteen 2009 Ford Motor Company vehicles are rated Top Safety Picks by the Insurance Institute for Highway Safety (IIHS), more than those of any other automaker.
- Our factories and the vehicles they produce have pioneered environmentally friendly techniques.
The Long Tail - Wired Blogs
Recovery.gov
I am old enough to remember a time in London when friends would spend the odd evening trying to work out what our contemporaries were earning. Back then, someone’s salary was an interesting source of speculation.
Nowadays there isn’t much point in asking what someone earns. Instead you can find out all you need to know about a Londoner’s wealth by asking two apparently innocuous questions instead. These are “Do you work in banking” and “when did you buy your house”.
A third, supplementary question “are you a Russian criminal of some kind” may occasionally clarify matters.
The first question is important. The last few years have seen rewards in the financial sector move far beyond reach of any other salaried economic activity. Of my own university contemporaries, with one exception, every single person who works in banking or finance is richer than everyone who does not. Along with that spectacular exception (Dr Michael Lynch, the onetime billionaire founder of Autonomy) I am one of only a few people not working in finance or law who could be described as vaguely prosperous.
But the housing question is just as much a cause for concern. Someone brilliant in our industry who has not yet bought a flat, or who has bought one only recently, cannot reasonably expect to be well housed in London in their lifetime. Contrastingly almost any minor advertising staffer who borrowed heavily in the mid 80s is a millionaire. If this iniquity affected people by gender or race rather than by age we would consider it appalling.
These problems aren’t unconnected. The property issue is certainly worsened by the city/oligarch factor (it is an eye-opener to see how well senior advertising colleagues live outside London, New York and Tokyo where they do not have to compete with large financial or expatriate communities). It is compounded by a tax policy which taxes earnings derived from work at 41% but gives vast allowances to money made from selling your house, engaging in Russian criminal activity or peculiar banking practices. Taxing the proceeds of hard work more heavily than the proceeds of luck and deviousness seems odd behaviour from a chancellor who is supposed to be a Socialist and a Presbyterian, but there you go. It’s also a bit galling to see London endlessly celebrated as a “centre for the creative industries” when the city’s real wealth goes to people of high numerical ability yet limited imagination working in a culture of stultifying conformity.
So how can we compete? We can’t.
So, er, don’t.
Everything we have learned as marketers surely teaches us that you should never tackle a competitor in a field where they enjoy unassailable strength.
It is now almost impossible to out-earn people in financial services. It is, however, amazingly easy to outthink them. They are not imaginative to begin with. But, on top of this, their herd mentality has rendered them incapable of independent thought, action or taste. A successful banker simply aspires to be an even more successful banker. (You can see the effect of this in ghettos such as Clapham or Fulham where the uniformity of aspiration has created something resembling a council estate only with the average income multiplied by 50.)
Indeed, so driven now are such people by competing with each other (rather than asking whether the game is worth winning) that, in the Anglo-Saxon world at least, almost all people with type-A personalities (what I call ‘Nature’s BMW drivers’) have completely lost the plot of capitalism. The purpose of which is surely not to accumulate as much money as possible but to accumulate as much money as is necessary to have a good time with as little effort as possible.
In asking the question “who has more money” we have completely lost sight of the question “what is this money for?”
Look at the strange people who are admired in business nowadays. Twenty years ago it was people like Hugh Hefner or James Goldsmith, people with lives worth emulating: now it’s a bunch of austere workaholics – or septuagenarians who still go to the office every day. Do you think Hefner (a pioneer of the working-from-home movement, incidentally) ever took a Blackberry into the grotto? Now there was a man who really understood work-life balance.
Today, no sooner is the word out that Conrad Black knows how to throw a decent party than the vultures start circling.
We, as a creative industry should fight this trend. We should ignore the senseless greed and purposeless effort of other areas of business and set out to establish ourselves as simply the best place for sane, imaginative and thoughtful people to work anywhere in the UK. Which isn’t far from what the business was when I joined it in 1988.
Back then we earned a lot less than our banking colleagues too. But I don’t think we doubted for a second that we had other benefits which compensated for the differential. With a little imagination (and that is our USP versus bankers, remember) we can restore those benefits.
Here’s how we could do it at Ogilvy.
1) Move at least half the agency out of London. Brighton or Ashford might be a good idea for a second location. New electronic means of communication no longer require everyone to be in London all the time. Ashford (with fast trains to Victoria, Charing X and St Pancras) is a hideous place but the surrounding countryside is glorious, with apple-cheeked barmaids serving large tankards of frothing ale on every village green. An agency which offered the option of living out of London would attract more than its share of those bright young talents who can’t afford London. Your agency could have its own cricket pitch (better than a pool table, no?). Best of all, people could stay in Whitstable all week.
2) Cut all senior people’s salaries by 20% and cap them at around £100,000. As part of my rejection of senseless capitalist thrust, I occasionally ask myself whether extra money would actually add to my happiness. The answer is the opposite. When given more money than you need, one is prone to engage in foolish, uncreative, status-driven activities such as buying second homes abroad (only sensible, frankly, if your idea of a good summer holiday is going to the same bloody place every year and then spending two weeks learning the Italian for “my septic tank appears to have exploded”). Yachts - no more than floating caravans that make you sick - are even stupider still. The rising levels of wealth, coupled with the low prices of consumer goods, mean that differential displays of status require increasingly foolish expenditure.
3) Use half the money saved in senior salaries to create a large bonus pool to be shared among younger staff – who generally need lump sums more than senior people do.
4) Use most of the remainder to join Netjets and keep an Ogilvy Gulfstream poised on the tarmac at Lydd or Biggin Hill 24 hours a day. As Hefner, Warren Buffett and Conrad Black have all found, private aviation is the single compelling reason to be rich rather than merely prosperous. And, as Conrad found, the very best kind of private aviation is the kind you don’t pay for yourself. (It’s more tax efficient, too.)
5) Award bonuses not of money but of working perks. After a certain length of service people earn the right to work from home weekly or to work irregular hours.
6) Spend well on hospitality and entertaining (Paris, remember, is only an hour and a half away). If they are having a good enough time, people don’t mind what they are paid. I mean, if you heard that a friend of yours had landed a job at the Playboy mansion, your first question probably wouldn’t be “what’s the pension plan like?”
7) Instigate a four-day working week of 10 hours per day. I do most of my best thinking at the weekend, which means a three-day weekend would make me 50% more productive. And what a USP that would be for future recruits.
8) Remove payment by the hour and replace it with – well, anything frankly. This system of payment maintains the absurd pretence that value created is proportionate to effort expended –the very belief a creative organisation should be fighting. According to payment by the hour, the value of a song is directly proportionate to the time it took to write it. This conception leads to the encouragement of unproductive but time consuming activities in agencies: account management, for instance.
9) Kent Grammar schools would amount to a saving of perhaps £30,000 in pretax income for most senior staff with children – partly offsetting my swingeing pay-cuts. Private education is another rich man’s folly – generally a means of ensuring that your children can eventually lead professional lives in banking and accountancy involving just as much grinding tedium as your own. (Fortunately I have different aspirations for my two daughters: my dream is for them to become country and western singers, and hence I have told them that an expensive education would be a serious setback to their careers versus, say, time spent waitressing at a truckstop.)
10) Restore compulsory company cars (au fond people really prefer cars to salary – but if you give them – or their wives – any choice in the matter, they tend to choose the boring option of money instead). The agency should also operate a small stable of really flash motors to loan to younger staff. If a 23 year old can turn up at a wedding with their banker chums in an Aston once a year, who cares what they actually earn?
Money is, in short, a commodity. As believers in differentiation, we should seek to reward people in currencies that our competitors cannot supply in greater quantities – such as civility or quality of life. Unusually this approach could actually hold appeal to our shareholders and ourselves.
How do you react to this proposal? I would be very happy to discuss it further – either in the space below or at a meeting held at a country pub some time after 11am.
Too radical? It is only a later expression of David Ogilvy’s dream of moving the agency to Princeton from Manhattan, a plan vetoed by cowardly colleagues. Its time has now come.
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