Up until last year, when things really got tough (fiscally and image wise), it was commonly felt that companies went through two types of management–one that could carry them through the tough start-up period and another that could run a successful enterprise.
The same group of people seldom managed the company through both phases of growth.
This past year, the line between the two management styles has become muddied. Especially with the added scourge of senior management dipping too deeply into the corporate well for their own good.
The survival mode of operation is forcing management to conserve their most precious resource: talented people.
By cutting back to a core group of talented, motivated people; management not only finds they can run “leaner, meaner and better,” but it is also a better organization overall, as a result of the changes.
Re-Assessing Positions, PrioritiesManagement has to assess what they are doing internally versus what they should be doing internally. Then they can determine what they should outsource.
Today, few manufacturers in the industry do much – or any – of their own production in-house.
In fact, many of them are essentially technology developers and marketers.
They buy cases from specialists; have boards and packages produced and stuffed by specialists; and purchase a complete range of components from specialists. Many like Dell, HP and Cisco never even take possession of the product.
Instead it is shipped direct to the channel partner or consumer.
This permits management to adapt more rapidly to sudden industry/marketplace changes. Technology and manufacturing can be changed almost overnight.
Management realizes that it takes almost no time at all to reverse-engineer even the most advanced technology, thus nullifying their perceived advantage. In addition, the company doesn’t need to be tied down to heavy investments in production equipment which has to be prematurely written-off and replaced.More importantly, they don’t have to deal with the problem and expense of hiring, firing, training, retraining and retaining personnel.
Fixed assets not only lock companies into specific technology, they are quickly outdated.
Outsourcing permits maximum flexibility. It preserves capital and can often produce dramatic savings. In addition, it frees management to focus its energy on more pressing areas ofconcern … like marketing and staying ahead of the competition to garner more customers.
Marketing Mind-Set Changes
In addition to examining their manufacturing functions, management has to look at their marketing communications activities.
Companies have been cutting their internal communications staffs instead of expanding them. At the same time, the need for solid communications programs has grown.
Management is finding that a good agency can do more than simply provide advertising and/or public relations services. They are turning to them for total marketing and communications efforts.
The trend is a solid move toward creating marketing partnerships between the agency and the company rather than simply having the agency create ads, pump out news releases and compile mailing lists.
Because of the fiercely competitive and rapidly changing environment, management is not only more cost-conscious; they are also more market-driven. To take advantage of as much of an agency’s expertise as possible, management has found that they are sharing more of their strategic marketing plans with their agency so that they will be better and more effective partners.
Companies are finding that one of the key benefits of a partnership relationship is objectivity. The agency has to continually stress that customers buy products and services because they offer benefits greater than the cost of the goods and services. In addition, they buy from people, not companies. Few people buy solely on the basis of advanced technology.
Companies and agencies that have combined the efforts point out that while there are differences in the two disciplines, the purpose in either case is to communicate something to someone.
Communication, whether it is advertising or public relations, assists the company in selling something to someone … hopefully a lot of something to a lot of someones. The difference is that PR coverage has to be earned while advertising exposure must be paid for.
In addition, the new demands on the agency forces them to work harder for their fees. Agencies are offering new services because they know that a total communications plan is important to a company’s overall marketing effort. In addition, a totally involved agency enables the company to stay flexible and within budget.
While the partnership role provides greater opportunities for the agency, it also places more responsibility on them. If the agency is more involved with the client, they are also more accountable. The agency must serve as a facilitator in helping the company organize its thoughts. They make suggestions and recommendations on decisions that can have a major impact on the company’s success.
To provide this level of support and improve the partnership relationship, firms involve the agency in sales calls, sales meetings, distributor meetings and trade shows. The result of these additional activities is better-focused communications programs, activities and results.
While the debate continues to rage, firms that use their agencies for more simple publicity find that a single agency – a strong agency — doing more for the firm is not only worthwhile, but also very cost-effective.
Both parties invest a lot of time and effort in the relationship. The partnership commits the agency to the client’s success. The partnership gives the client optimum freedom to change direction almost overnight. In a partnership, all of the parties concerned are familiar with and committed to the companies’ success and position in a highly volatile marketplace.