Why Brands Go Wrong?

Yes, you read it right. I have my reasons why I have used the word 'brands' instead of 'branding'.

Branding? Can be done with enough financial investment. Call in consultants of all colours and shades ( but it will be better if they are of western origin!) and you have a neat branding package going. Start a TVC blitz and you have people talking about your branding. Sponsor some cool events and you have your logo splashed all over. Call in more consultants and they will tell you how to put a new spin to your story. Really, its that simple. BUT, your brand can still fail!

The 'brand' is the total culmination of what the organization is about. It is the ultimate statement for its existence. Its the summum bonum of your products and services. It is your organization. BUT, what is your organization if it is not your PEOPLE? What is your products and services if your PEOPLE don't deliver them as promised? What is your brand if your PEOPLE don't believe in it? Sound trite simplistic? Sounds common sense? I think it was Ram Charan who once said that common sense is not very common. That's probably why, very little is done to align the PEOPLE to the brand. Many organizations seem to take it for granted that when you have a name and a logo and a brand, their people will fall over heels to live the brand. It never happens.

There needs to be a concerted and sincere effort to get the message across to the people. Not only that, there must be sincere effort taken to gain their feedback. Only when these two things are done, will the people start living the brand on a day to day basis.

Brand and branding fails or succeed because of the people in the organization. So, why not start with them?

Sounds common sense?

The Talking CEO!

Something for all of you to chew on.

A few days ago I had a little professional disagreement with a fellow consultant. I said that the most important function of a CEO or any person who calls himself as the chief decision maker is to 'talk' .ie. to continuously engage his/her employees in a conversation so that employees are able to constantly touch base with the higher hierarchy of the organization. My colleague disagreed. Her contention is that the CEO has better things to do. Really?

What does a CEO do? Through whom does he do the things he wants to do? Who are the messengers who are supposed to carry his messages? Who else but his employees (many CEO's often say they prefer to call them 'my people'). Whatever.

But, the question is do you talk to your people or are you leaving them to their own devices? Are your people well informed of the changes that you are going to demand from them soon? Have they heard from you through your own words about the possible M&A that is going to happen soon? Or are they still in the dark and fearful of their future? Have you explained to them why all these cost cutting measures are necessary? Or, are your people making up all sorts of dooms day scenarios?

It may not sound glamorous for a CEO to say that his major job function is to 'talk'. But, except for the most ignorant, I am sure that the rest of us will understand what he means when he says that. In essence, a CEO's most critical task is to engage his employees in a manner that gives them the confidence to face up to the challenges ahead and the avenue to clear any doubts or lingering uncertainty. And, this 'talking engagement' must be done on a continuous basis. It is no use for a CEO to start taking to his employees only when the organization is in trouble. It will be too late by then.

In my dealings with organizations big and small, the one thing that I often hear is how easy or difficult it is to meet and talk to the respective CEOs. Inevitably,when I come across a group of managers who seem to be passionate about their work and are
actively living the vision, mission and brand promise of their organization, they also praise how easy it is for them to meet and talk to their CEO. And, as you might have guessed already, the opposite is almost always true too.

Focus groups, town halls, division meetings, regional meetings are all fantastic opportunities for the CEO to engage in a conversation with his employees. The problem is that usually all these forums end up as 'instruction giving time' an over time employees tend to view these forums as harbinger of bad news and more work! Can we blame them?

So, I stand by my statement : We need talking CEOs! (you know what I mean!)

Listen to your customers!......For your own sake!

Yet again, there was a letter from a reader of the NST (14 February 2008) lamenting about Malaysia Airlines (MAS) mealboxes. In no uncertain terms, this customer of our national carrier has declared that he has started to use a budget carrier for domestic travels (Air Asia of I presume!) and for international flights, he has started to scout around for other regional carriers (I suppose that means SIA)!.

I read this at about 9 pm last night after a 2-day training program on Customer Focus for Etiqa. And, of course the issue of MAS came up for discussion and we had a lengthy debate on why MAS is apparently trying its best to loose its customers!

I have written here before on MAS’s service standards or rather the apparent lack of it. Things, at least as far as its customers are concerned, don’t seem to have improved that much. I was on a recent flight and I didn’t like the food either. Was I very hungry? No! Could I have waited to be home for a good meal? Yes! Was the issue of food so important for me on a flight? No! So why then I am complaining just as so many other loyal MAS customers? Simple really…..because we were once treated much better. We had once received much better in-flight experience. We had once felt the difference between a budget carrier and a full service carrier. Now, we are confused!

That’s what this is really about! Confused customers of MAS. What does MAS stand for? What does low cost operator with 5 star service mean? Is that even possible? Where is that 5 star service going to be showcased? I which areas of our MAS experience are we going to taste this 5 star service at low cost operator formula?

While we struggle with all these questions, MAS competitors are tempting us to break a bond that we have nurtured for many years. Yet, the temptation is strong and the wondering eyes are justified as the counter offers seem to be genuinely better.

The bottom line of our national carrier is said to be improving or at least that’s what I am told by the media. I have no doubt about that as it is really not that difficult to show bottom line improvement in the short term if you know what to cut and what to slash and what to reduce. The trick is to keep the bottom line healthy in the long run. That needs more than slashing and burning. That needs growth. Growth needs market leadership. Market leadership needs customer loyalty. Customer loyalty needs quality service. Malaysia Airlines is loosing its sense of quality service.

Now, analyze that!

What's in it for Me?

Since sometime the middle of 2007, I have been collecting letters sent to the letter's column in the NST from readers who are unhappy with the various aspects of service provided by Malaysian Airlines (MAS). I have even blogged about the controversy surrounding MAS's decision to switch to meal boxes on regional flights. Thats another story!

Now, what I did with these letters (16 in total) was that I pasted them on 2 manila cards and showed it to the participants of my recent program on Customer Focus. My question was : How would you feel if you are working for a company which gets so many complaints from customers and you read hem on a daily basis in a national newspaper. The unanimous answer was "We will be ashamed"! Yes...that sums it up.

I guess, I made the point of my program with them crystal clear in the first 15 minutes and the rest of the 2-day program was all about "How not to end up like MAS"!
Many times, frontliners are asked to give world class service and often times are required to attend this or that training program. These programs are well intended in the sense that they are aimed at delivering new customer service skills and/or improving upon existing ones. The missing link, however is what does it all mean to them as individuals. Why should THEY provide good service? Why should THEY strive to achieve customer loyalty? Why should THEY bend over backwards to make customers happy? Just so that the company can make a few extra ringgit? I don't think so.

People must have a personal stake in providing excellent service. They must see the connection between excellent service and themselves as individuals. As far as I am concerned, excellent service is a direct result of the good feeling that people gain from providing that service and not merely because customers are happy; that is a by product. Pike's Fish Market should come to your mind right now...

Anyway, the point I am trying to make here is that managers (maybe with the help of consultants) should find ways to make that connection. Out of this connection will come the real meaning of excellent customer service and out of this meaning will come the purpose why they as individuals must at all times strive to provide excellent service. Because, they have a stake in it!

Management by Walking Around

Why is that almost everyone in any organization feel that their leaders are not listening to them enough. The humour goes that "Bosses don't have time to 'turun padang' because they are busy with courses ....Golf Courses!"

Jokes aside, is this true? Or, are employees expect too much from their bosses. After all bosses do have work to do, although at most times employees have no idea what that is!

Or, could it be true that our managers and business leaders have forgotten the simple art of having tea with shop floor workers or the front liners to get firsthand knowledge of what is going on in and around the business?

People like to be appreciated and the one thing that people like to hear which shows that they are appreciated is " What do you think?" This simple question goes somewhere deep into their brains and miraculously their neurotransmitters seem to send the message that they are being appreciated. Otherwise why would the boss want to know what they think? Magical? Simple? Yes!

I find it insulting to the intelligence of employees when bosses are fond of saying that employees have no idea of the difficulties and challenging circumstances in managing the business! Come on! We all know how difficult it is to manage a business especially when you have t suck up to powerful interest groups both from within and without the organization. That still should not stop a manager from being at the pulse of action to hear first hand of what is bothering the employees. Of course, some managers have also told me that they are afraid to ask for feedback from their employees for fear that they will not be able to do anything about is as most of the issues are beyond their control anyway. In other words they dread being labeled NATO (No action, talk only). In my dictionary, NATO also means Not A Team Operator. How do you instill team spirit when you are not bothered to find out what your team thinks or feels or hopes to change.

Of course, listening can be painful. We may hear things we rather not hear. We may hear things which we hoped others have not noticed. But hearing them out now will save a lot of pain later and you will win your team to your side to boot.

So, the Year of the Rat is approaching. This is a good time to do some management by walking. Gong Xi Fa Chai everybody!

Etiqa : The Journey Begins

Happy Thaipusam to all my dear Hindu friends and all Malaysians.

Many of you probably will still remember that I began my 2007 with an extensive program for Maybank/Takaful Nasional/MNI. It was called Personal Mastery for Managers. At that time, the managers of Maybank Fortis/Takaful Nasional and MNI were undergoing a Change Management program to prepare them for the eventual merger of the 3 entities. Since then, you would probably also have come to know Etiqa with its smiling face logo and striking colour. Etiqa is the new entity born out of that merger.

Once again, I am honoured to be involved in the continuing evolution of Maybank Fortis/Takaful Nasional/MNI as the brand new Etiqa. This time around, I will be sharing my ideas and thoughts with both its managers and executives on the areas of Brand Leadership and Customer Focus.

Etiqa, I am happy to tell you, is much more than a mere name change. It is definitely much more than a change of corporate logo. Etiqa is poised to become a new powerhouse in Malaysia's insurance and Takaful scene as for the first time, consumers in Malaysia will see the human side of insurance and takaful. This is the promise of Etiqa : Humanizing Insurance.

This new brand has 4 attributes : Performance with Conscience, Crystal Clear, Hand in Hand and Rock Solid. The people of Etiqa have made the commitment to behave in the following ways : Creative, Genuine, Generous, Inclusive and Dynamic.

As you can see, these are lofty promises but they are not whimsical ones. Much energy and soul searching has gone through it. Countless discussion sessions, focus groups and market analysis have been carried out to come to these promises. These promises, I am confident to say, will be kept as the people of Etiqa believe in them.

Of course, there will be challenges ahead as Etiqa is a story in the making and I am proud that i have had a small role to play in its continuous evolution.

At the end of the day, as I have always said, a brand is an experience. Experience is the only thing a customer takes away with her. That will be my key message for the 13 groups of managers and exceutives that I will be meeting over the next 3 months.

Have You Noticed Your Supervisors Lately?

As businesses become more complex so does management. Cliched? Yes. But, it still needs to be said. This is because things seem to be resistant to change more than we can imagine. Take for example the role of supervisors in our organizations. What roles do they play? What roles do we expect them to play? Surprisingly, many organizations that are embarking on complex change initiatives don't seem to think that change should and must happen at all levels of management and that includes the supervisory level. Oh yes I know! Supervisors are not 'management level' right? Wrong! Nothing could be more damaging to the eventual success of a change effort than neglecting the supervisors. In fact, some of the manufacturing concerns that I have rendered my services to are beginning to realize that supervisors are not merely 'quality control police' or 'keep-up-the-productivity' brigade. They are, in fact, an important part of the management's chain of command.They are no longer viewed as message carriers but as an important contributor of ideas and strategies that are received and acted upon by their managers. Many of these organizations are also comfortable in using management lingo and labels to deal with their supervisors.

Yet, there are instances where supervisors are viewed as nothing more than order carriers. Their skill development is neglected. There is nothing to give them pride as supervisors. Their suggestions and recommendations are often times disregarded arbitrarily even though they are the ones closest to the work floor. At the same time, somewhere in the plush offices of the 'management level' managers and their managers undergo extensive change management programs.

Ironic I must say!

Raring to Go!

Happy 2008 Everybody!


I hope all of you had a great New Year. I had a well deserved rest and had the opportunity to reflect back on 2007. It was such a luxury!

Well, 2008 is here and I have a feeling that it's going to be an exciting and fabulous year. I am not talking about the impending general election. I am talking about our daily bread and butter issues.

Since everybody seems to be in the game of predicting whats going to happen in 2008, I will add my 2 cents worth too:

1. The gap between Malaysia and Chindia (and Vietnam) will increase to the latter's favour and the true impact on our economy will become clearer.

2. There will be more mega M&As starting with the pharma industry and also possibly further consolidation in the automotive, steel and airline industries. For the first time Indian/Chinese companies will conduct more M&As on European/American companies than vice versa.

3. We may see the first non-Malay CEO of a GLC and/or ULC company before the year is out.

4. Africa will awaken vis a vis its importance to China and India as a critical supplier or raw materials.

5. The first energy-resource related armed conflict vis a vis Russia and it's former fellow Soviet Union republics.

6. India and China will firmly establish themselves as the favoured destination for business/technology education.

7. The 2008 Olympics will be one of the most successful yet controversial games ever!



And my wishes for 2008 are:

1. Malaysian CEO's take more direct interest in the training and development of their employees.

2. Our policy makers will institute some real measurable strategies for talent development.

3. CSR standards also include human capital development as part of its dimensions.

4. Air Asia acquires Tiger Airways!

5. Proton gets Tata or Nissan as its strategic partner!

6. Malaysia gains back loss ground to Singapore in the biotechnology industry.

7. Qualified technocrats are made ministers for critical ministries.


Have a great year ahead and I hope you continue to enjoy my FirstCoffee!

KM : Has it Faded Away?

As we are drawing closer to the end of 2007, I thought it will be a good idea to dedicate this last entry for the year on an issue that was really hot at the beginning of the year but has over the months simmered down so much that it is no longer in the popular lexicon. I am referring to Knowledge Management.

Knowledge Management (KM) used to be such a buzz word. Numerous seminars, workshops and conferences were held to decipher and understand what it is to be a Knowledge organization and how it impacts the length and breath of the organization’s business processes, human capital and strategic outlook. Even during my training / consulting programs, there will inevitably be somebody who mentions KM during our discussions and case study reviews.

So, what has happened to KM since then? Well, the way I see it, organizations that showed a keen interest in KM can be divided into 3 distinct groups : Those that showed interest but lacked the wherewithal to translate this new understanding into tangible results (which in due course killed off even the initial interest in KM); those that viewed KM as a passing interest; and those that saw a competitive advantage and promptly instituted the necessary systems and processes to benefit from KM.

To me, KM was not a fad nor was it a new invention. At best, it was a ‘dis-covery’ of an age old knowledge that we should do what we are best at and that there must be a way to codify and transfer the knowledge that we have for continuity. The age of artisans lived the KM way as did the age of industrialization; each in its own unique way assisted or limited by the prevailing technology existing then. Yet, in the age of ICT people found there to be a need to rediscover KM and take a fresh look at it all over again.

Organizations have always been about ‘knowledge’ and I dare say they will continue to be so. Knowledge is the bedrock upon which Rockefeller built his empire and on which Tony Fernandez is building his. Knowledge is what makes Toyota the number one automotive company on the planet and knowledge is also what makes Ikea such a loved name. Each has leveraged on it’s knowledge to build what the consumers want, sell at a price the consumers desire and innovate as per the fickle taste of consumers. Technology and ICT were merely enablers. I think it is worth repeating : Tech and ICT are merely enablers.

In my own OD model, I have devoted an entire process for KM which I termed Knowledge Edge. Managing knowledge is one thing but using it for competitive edge is entirely another. I suspect many organizations are probably adept at the former not the latter.

Now, lets look at a quick case in point; McDonald's. There was a time when McDonald outlets opened and closed for the day just like shopping centres : 10am-10pm. There were a few outlets here and there that were open till ‘late’ – 11 pm! Today, McD is a 24 hour operation with big screen TV and live soccer matches. Wait a minute, isn’t that just like our mamak shops? Yes it is and that’s precisely the point. The youngsters who hop into a McD for burger and fries end up later at a mamak joint because the mamak joint is open 24 hours with soccer matches thrown in for good measure. The dramatic urbanization of many parts of the country has brought about a 24-hour culture whereby the city practically never sleeps. Malaysians being Malaysians, food is the greatest time-filler. Hence McD is riding on this. Knowledge Edge at its best.

Now, lets look at another case as a contrast. Through some personal contacts in a major housing developer in the Klang Valley, I got to know quite a bit about the challenges faced by this company. These challenges can be broadly categorized into 1. Customer dissatisfaction. 2. Surprisingly high defect rates and 3. Poor sales. I was told further that other than chastising the employees for poor sales and dwindling market share, the leaders of this organization never once got their sales people, marketing people and engineering people together for any meaningful discussion. The one rare occasion when all were present in the same room, it was a session of ‘do exactly as I tell you’. It seems that the developer is targeting high end buyers and hence has branched out into high end housing and condominiums which are exclusively branded and marketed. This of course will attract the top 5 percent of the Klang Valley population. At the same time, this high end clients are a stickler for quality and extremely fussy when what they have paid for does not meet their high expectations. The brunt of their complaints and demands are directed at the ‘customer service’ department which is nothing more than an ad-hoc collection of clerks, secretaries or whoever takes a call or bumps into an irate buyer!

Ironically, these motley crew of ‘customer service’ team has come to learn quite a bit about the likes and dislikes of their customers such as the preferred flooring style, pool design, furnishings and even how the squash court should have been designed. The tragedy here is that nobody in this organization, least of all its leaders, have bothered to capture and transmit these knowledge in a way that becomes it competitive edge.

It would help a great deal to make Malaysian companies more competitive in the coming years if business leaders begin to realize that every organization is made up of a living, breathing knowledge structure. The most critical job responsibility of a Malaysian CEO in the coming years will be to find a way how these diverse knowledge structures under her command can synergize for the benefit of the entire organization.

Well friends, I wish you all a blessed Christmas and a great New Year. I am going for a much needed holiday and will be back on the 2nd of January 2008.

Cheers!

Managing Diversity

In the last 3 weeks I have spent close to 12 days down south in the manufacturing hub of Senai, Johor. During my programs there, I got to know many managers and supervisors alike. Apart from the usual issues that were discussed, they also touched on the issues relating to managing workers from other countries. As I have also come across this issue in other parts of the country, I thought it will be a good idea to look into this in this entry.

Foreign labour is already part of the Malaysian economic tapestry. The pros and cons of this, we will leave it to the politicians and the policy makers. For us, it is enough to know that they are here and we need to manage them to achieve our organization's objectives. But how different or similar is managing foreign workers compared to managing our own?

Take the case, of a group of foreign manufacturing line-operators who had such a 'bad' body odour that their Malaysian supervisor had to buy body deodorants for them or the example of a Malaysian manager who had to deal with requests for dangdut songs at part of the company's piped-music in the cafeteria.

But I think, the differences run deeper than that. If we take for example an Indian national who is a IT programmer, his social and psychological self will be very much different from us Malaysians. And, he will be more acutely aware of his socio-psychological differences when he is away from his home just as we do when we are in a foreign land. Similarly a Nepalese guard or a Vietnamese line worker will also feel these differences. A Malaysian Chinese will be entirely understanding if told not to bring pork from home into the cafeteria but for a Vietnamese worker from a village 300 km away from Hanoi, she would have no clue as to why she is being forbidden from eating something that is staple to her diet all these years. And, when this instruction is delivered with a certain sense of disdain and venom,it makes future positive relationship with her that much more difficult.

In my experience, most managers learn to deal with these differences on a trial and error basis. The ones who are failing miserably or are still unable to handle this diversity are those who:

1. view all foreign workers as homogeneous and they have one homogeneous characteristic and that is 'they are not Malaysians'.

2. has a superiority complex over these foreign workers.

3. feel that they are already burdened enough with their work without having to accept and handle cultural differences of and between foreign workers.

4. refuse to accept that these foreigners are not here merely for the money and that they also expect respect, trust, self development, a balanced work-life equation and social well being.

5. too much stereotyping of the country of origin.

6. a general lack of understanding and appreciation of the globalized nature of today's economic structure.

7. a racist and a bigot ( I have come across a few of this).


I am troubled when I sometimes hear Malaysian managers speak of these foreign workers as a temporary passing phenomena or as a necessary evil. The future of every nation in the coming years will depend on local AND much more on foreign talents that it is able to attract. Increasingly, these talents are coming from less sexier countries. My advise : Get used to it.

Proton Stays Single!

After months of retracted discussions, offers and counter ofers, denials and reluctant admissions, the Malaysian government has finally decided that Proton will end all discussions with all foreign parties that were touted as possible 'strategic' partners to the national car company.

The immediate reaction from the market is all too familar of course. Proton shares dipped and analysts and observers are all not too happy with this sudden turn-about.

Lets take a closer look at this latest addition to the colourful history of Proton sans the emotional baggage.

As it stands, Proton will continue to function as it has always done previously .ie. it will be a sovereign car maker. This, according to the government is because of the following reasons:

1. Proton has increased its market share from from about 20% plus to over 30% now and is well placed to increase it further
2. The Persona is doing well and more new models are on the way
3. Proton has entered the Chinese and Iranian markets.
4. Hence, Proton is strong enough now and can avoid a fire sale situation.

To be honest, Proton is definitely in a much better position than it was a few months ago. If you remember, I wrote about the Persona and said that it was indeed a good car. So, its not suprising that the Persona is doing well. However, I also said that one new model maketh no new future. May I also add that breaking into the Chinese and for that matter Iranian markets maketh no new future either. At the risk of oversimplyfying the issue, let me just say that these two markets are huge but extremely unpredictable. Will Proton be able to withstand any upheavels in these two markets?

Every major car manufacturer knows that the success of each new model is a hit-and- run story. To have a series of top selling back to back models is not impossible but not something that can be taken for granted either. Perodua did well with its models because it entered a market segment which at that time was less crowded and was able to carve out a nice little market share for it self unlike Proton that competes in a highly competitive market segment.

Also, what about the huge financial outlay needed to develop fresher models? The technology aspect of this is another matter all together.

Finally, have we forgoten the competition from India, Thailand and China? Can Proton single handedly withstand these competitions which will inevitably be about quality, price and volume?

On the other hand, I must admit that I am less pessimistic about Proton than most others simply because Proton has two critical advantages : huge production capacity and it owns Lotus. If these two advantages are leveraged we just might be able to have another world beater from Malaysia. The only question is that the whole Lotus issue is unclear. Also, I would suspect that Proton needs 2 new models next year. The Saga replacement is targeted somewhere in the first few months of 2008. I think Proton should not wait until 2009 for the proposed MPV. It should do that in 2008. This will give confidence to the market of Proton's seriousness in avoiding past mistakes.

Finally, I would also suggest that Proton look to India. Every major car maker is looking to India. In fact Suzuki is back on the automotive radar courtesy of its Indian market.

There is no turning back now for Proton. The next time it invites another car maker for strategic tea-talk, it has better be in good shape! We Malaysians will always wish the best for Proton. But, we will not be so forgiving anymore with our power-windows either!

Reality Check!

To all of you good people out there, may this year's Deepavali bring forth blessed joy, wealth and peace. Its going to be an excellent celebration this time around as far as Malaysia as a nation is concerned. Going by the tone of the Youth and Woman's wings of UMNO, much emphasis will be placed on building a united nation to withstand the relentless onslought of global competition and other forces of change in all spheres of life. So, I suspect this Deepavali will be a base to build a feel good atmosphere for all Malaysians after a year of racial verbal bloodletting. This will lay the groundwork for the next general election.

By now, you may already feel the difference in my writing. Yes! I did begin this article with a general broad-stroke of our nation's socio-political landscape. As you all know, I am very apolitical. However, I have a reason to dwell into that area momentarily this time around. The reason is this, everything said and done, we as a nation will always go back to unnesecary bickering and much time and energy will be wasted on trivial issues while our competitors are beating us left and right at every corner.

To make my point, I pulled out two newspaper articles. I am going to review these 2 articles this time around. On November 1st the NST in Biz News reported that Malaysia is 21st most competitive nation from a pool of 131 nations. The following are the rankings of a few other significant nations : Singapore (7), South Korea (11), Hong Kong (12), Taiwan (14). China was at 34 and India at 48.According o that report, even though Malaysia fell 2 rungs from 2006, we are still doing well on most other counts.

On 9th April I happened to read an intresting article also in the NST with the title Ace up India's Sleeve. Allow me to quote some satistics from this article : 18.5% of the the total workforce of Accenture are in India. Similarly IBM has 14.6%, Aviva 12.8% and Citigroup 6.7%. In the case of IBM " Indian teams now autonomously develop software solutions from start to finish for global clients". AND, it was reported that by 2010 India will lack 500,000 egineers.

How long do you think a nation such as India in today's economic and business environment will take to close the gap with our position as the 21st most competitive nation? Where was India 15 years ago? Get my point?

Well, think about this while munching into your muruku and 'whacking' some tosai and mutton. Cheers everybody. I will be busy next week with my program for RHB Insurance on Transformational Leadership. Till we meet again, Happy Deepevali and Happy holidays.

Brand Building

What do Google and Starbucks have in common? Lets see now.. they are both hugely successful, they are both valuable brands and they are both helmed by visionaries. There is of course this one other similarity that many are not aware of...they are both misers when it comes to advertising. Comparatively, both Google and Starbucks spend very little in advertsising in their respective industrie. Yet, they are growing and returning uninterrupted returns to their shareholders. What's the secret?

The secret is simply that they have a winning product and a winning value proposition which build more goodwill than any slick adverstising campaign can ever produce.

This is not to say A&P is not important. In fact sooner or later even Google and Starbucks will have to up their A&P budget when competition and/or consumer trends shifts. The point however is that a winning product-value offering will have a greater impact on long term sustainable return than merely a bombardment of A&P campaigns. The most valuable brand today is probably Coca Cola. I am going to be a heretic for saying this but I am goig to say this anyway : How much is the value of brand Coca Cola is the result of its inherent value proposition as opposed to its consistent and powerful imagery and association in the minds of the consumers. Let me put this way : There are some movies that are popular because of the hype surrounding it while there are others that become great hits simply because it captured the hearts and steadily won viewers. See my point?

Take Phuket for example. In terms of tourism, Phuket stands heads over shoulders above many other destinations in Asia. The thing about Phuket is that it offers something for everybody. It offers a unique blend of experience for both the leisure and buiness travellers that it has created a brand image without even trying. Even a devastating tsunami could not keep it down for too long.

So, Google and Starbucks have build a reputation that is a direct result of their product-value proposition. This is not, as we can see now, soley dependent on A&P.

_____________________________________________

Arrifullah of Petronas Fertilizer Kedah : I am glad you enjoyed my write-ups on Proton and MAS. By the way, Datuk Seri Idris Jala recently clarified that the survey on mealboxes involved 35,000 passengers on 383 flights and 91% of the customers were satisfied with the mealboxes. I am happy to see that MAS has provided more details on the survey. Still, I am not sure what 'satisfied' means. What does 91% 'satisfied' response means if the other two choices are 'excellent' and 'great'

Surveys, especially when carried out by interested parties sometimes tends to prove what have been decided rather than to help in making the right decision.

Anyway, it has been reported that the mealboxes are on a trial run until the end of the year and more customer feedback is expected.

My hope, as always, is for Malaysian businesses to make the right service oriented decisions. That, for me, is the only winning formula.

To Serve or Not to Serve?

There is an interesting 'conversation' going on in the readers'opinion page of the NST these last couple of weeks. It all started a few weeks earlier when a frequent Malaysian Airlines customer wrote-in to remind Malaysia Airlines (MAS) to not loose focus by competing with low cost carriers and to stick to full service offerings. This was followed by another reader who complained about MAS providing only mealboxes for domestic and short haul international destinations. This was followed by a reply from MAS that their survey had indicated that MAS customers are satisfied with the mealboxes and it is comparable with 15 other international airlines. This was followed by a letter from another MAS customer who questioned many aspects of the reply and insisted that either MAS bucks up or he will take his business elsewhere!

According to the reply from MAS, the survey found that customers are quite happy with the mealboxes. Its not clear how many respondents were involved in this survey or which sectors were covered. Did the respondents say mealboxes are ok, great or one of the 10 things that are ok? It seems customers, during the fasting month found the mealboxes useful as they can 'take-away' for later consumption. What would these very same customers say now when it is no longer the fasting month? Comparable with 15 other international airline standards? Well, lets be clear here. Firstly, just because it is a foreign airline it doesn't mean that it is of international standards. The benchmark for MAS must always be the likes of Singapore Airlines, Cathay Pacific, BA, Lufthansa, Emirates and the like. Secondly, air-travel in the USA and Europe has lost most of its privileged status. Air travel for them is just another mode of transport. In Asia and Malaysia air travel is still considered a status symbol even after the arrival of low cost carriers like AirAsia and Tiger Airways. So, if a Malaysian flies MAS to Kota Kinabalu (2 1/2 hours) instead of AirAsia I can quite safely say that there is still a prestige issue at play here. Otherwise, why would he /she pay so much more for a MAS ticket when a much cheaper alternative is available? Now, with that purchase, what does he/she expect? Full service treatment of course! That means what was previously offered if not better.

Lets look at some of the possible reasons why MAS would want to take this path. Having pre-prepared mealboxes instead of the usual full service offerings together with its utensils will reduce take-off weight of the plane which will translate into reduced fuel consumption ( a huge cost savings) and increased RPK (revenue per kilo metre). There will also be a reduced need for a big team of cabin crew which once again reduces cost and increases revenue.

So, its all about cost reduction. I can appreciate that. Idris Jala said he will do a business turn around and as far as I am concerned, such cost reductions are absolutely critical for him.

However, what is the impact on MAS over the long term? The following 3 possibilities present themselves:

1. MAS customers get used to this new service offerings and are pacified by an increase in service standards in other aspects, or
2. MAS customers find little differentiation with low cost carriers on those routes and switch their alliance, or
3. Regional airlines fill the gap left by MAS in the full service category once the open sky policies are in effect.

The thing is this, service and the resultant customer experience is more a function of 'perception' than real product/service experience. For example, Japanese watch brands like Citizen make great watches but the perception is that Swiss brands are a class of their own. How would a current Porche owner feel if Porche starts selling RM100,000.00 models in Malaysia? It is a precept ion game isn't?

Good things have started to happen for Malaysia Airlines. However, lets also remember what one modern business sage have said : "Good is the greatest enemy of Great".

We would like to see a great Malaysia Airlines. You with me?

That Magical Thing Called Branding

I read an interesting piece of research news today. It seems a research was carried out in Scotland to compare the effectiveness of cheap running shoes compared with their more expensive rivals. The data which was scientifically recorded by a small back pack, apparently showed that the cheap ones are quite as effective as the expensive ones in absorbing shocks and keeping pressure away from the knees and other joints. But what actually caught my curiosity was an expect of the findings that the researchers mentioned only in passing. It seems, when asked to comment on the effectiveness of the shoes, the 43 volunteers judged each pair of shoes on very subjective terms. They can hardly see much difference between these shoes. The catch is this : The labels of these shoes were masked with tape. So, the volunteers did not know what brand (hence the price range) of the shoes they were using.

Now, I wonder if they knew the brand that they were wearing would that have changed the way they responded about each pair? Would they have given a more favourable feedback on say, Nike compared with a cheaper and unknown brand?

In all likely hood, I believe if they had known the brand, their perception would have been dramatically altered. After all that is what good branding is all about isn't it?

I am passionate about cars. To be more precise, I am passionate about how each manufacturer brand their models. Recently I noticed a Proton Satria Neo side by side to a similar looking and same in category American make and to be honest, Satria Neo looked much better. In fact it looked sturdier and solid all around. Immediately (as it often happens) my thought wondered to the branding behind each of the model. What does the Satria Neo stand for? What does its rival stand for? What image do I show if I drive a Satria Neo?

You may not realize this but Audi is actually in the same league as Merc and BMW. In Europe these brands compete with each other. In Malaysia, Audi is catching up but still peeople always look at the Merc as the signal of their arrival on the corporate/VIP scene. However, the Audi is creating an image for itself as the embodiment of 'dare to loose' , 'class', 'the hell with the known' image. If you drive a Merc you have arrived (in the traditional sense). If you drive an Audi, you have arrived trail blazing!

So, how do I arrive in a Satria Neo? I suppose Proton expects me to figure that out!

There is very little branding. As the Scotish research shows, two products may be of equal quality but then selling them is not merely about quality as it also involves perception and perception is all about branding. Why else do you think Proton Arena is doing so well in Autralia as the Jumpbuck while it is a flop on our own soil?

Ok, lets look tourism in this context. If you travel to Italy or France, you are romantic, cultured and stylish. If you travel to India, Tibet, Nepal you are spiritual, searching and soulful. If you travel to Cambodia you are adventureous. Malaysia?

See, where is the branding?

Not too long ago, I shared with you guys about my visit to the pre-launch of the Persona. I hope by now you have had the opportunity to view the car. Quite a few are on the roads now. Don't be fooled by its similarity to the Gen2. Both use the same platform. But the Persona is no doubt, in my mind, a superiors car.

If you remember, I also said in that article that I am not so sure whether the Persona alone can help to turn around Proton. The reasons, as I have said, is simply because the problems at Proton are much more deep set than the management would like to believe. I just read a wonderful piece in the Edge (October 8) by Leela Barrock entitle "Malaysia Needs to Play Catch-up". She explored the sad truth about how far behind we are in the automotive industry. The following are some of the interesting points that I gathered from Leela Barrock.

22 years ago when we started our natoinal car project China, India, and Thailand were not even anywhere on the automotive map. The Japanese and Koreans were struggling to win over North America and Europe. Vietnam? Vietnam who?

Today, Toyota is the number 1 automotive company in the world. Hyundai is relocating its entire Atos line to South India to be exported to 65 countries. The Getz is next in line. Thailand is the world's second largest manufacturer of pick-up trucks. In 2005, Australia exported 140,000 vehicles although it doesnt have an Austalian car brand per se. Vietnam is the next blued-eyed boy for car manufacturers.

Proton had a 22 years lead time. But.....

So you see, a new model maketh no new future. The sooner Proton admits this the better. Whether VW is going to make a difference is another matter. I would still want to have the Proton as a Malaysian brand name when my children buy their first car. Why not?

All is needed is Change. Change at Proton. Now!

Gary Hamel in his latest work entitled 'The Future of Management' asserts that newer and more effective ways of managing people will be the competitive advantage of the future for companies. For those of you who have attended my Shifting Moments program, you will see that this is similar to what I have said many times : Organizations must develop a winning culture as that is much more difficult to be copied compared to a winning strategy.

I have written in my articles before of 200 year old companies that are still going strong today. Yes, they may have continuously reinvented themselves. They may have changed winning strategies after winning strategies. They may even have changed their entire business focus. Yet, I find it difficult to believe that all these were done despite their culture. How will a company continuously reinvent it self if there was a culture of blaming and a fear of risks? How could a company stay at the peak of its industry by merely having a winning strategy?

What is a winning culture? A winning culture is an organization's state of being. It is it's DNA. This DNA will determine how it creates, how it serves, how it rewards and most importantly it will determine how it sees it self under the sun. A winning culture is therefore akin to the soul of an organization. This soul/DNA is formed through a combination of chance and design. The Malaysian Rangers for an example is an organization that is rich with history and has a winning culture. It's DNA was influenced by the fact that it was born and bred during the Malayan Emergency. At the same time, its winning culture is also a result of the winning strategic designs of its earliest commanders. Similarly, NASA was born as a reaction towards the unexpected Soviet-led space race and yet it is as powerful at is today also because of its winning strategic designs. This DNA of winning culture takes time to form. we may be able to create a winning culture in a day through sheer empirical analysis or a burst of creative insight but not a winning culture.

What do you think will happen to Malaysia Airlines once Idris Jala leaves. Or, what do you think will happen to TM now that its supremo is being linked to the banking industry? If these organizations' success today are the results of their wining strategy, there is A huge possibility that their successes will end with these two towering individuals. If on the other hand, it was the result of a winning culture than their successes will continue no matter what. One is a short term share-holder judged success while the other will be judged by history as the winning formula.

But then, how are CEOs rewarded... for a winning strategy or winning culture?

Us vs Them

One of the things that strike me most in many organizations is that there is always a Us vs Them mentality between the staff and the HR department. Whenever, the employees speak of the HR department, it is always 'them. The opposite is also sometimes true.

Employees should realize that HR is for them and with them AND they too function in the confines of organizational objectives and restrictions. The HR department is not a policing department ( I sincerely hope no HR manager in this country is still playing that antiquated role!). Employees will have a better chance of getting what they want if the keep the following things in mind:

1. Be reasonable
2. Know that the grass is always seem greener the other side
3. Working with HR will take them further than antagonizing them
4. Take a keen interest in the workings of the HR department
5. Make it know to the organization that they expect nobody less than a world-class HR manager.

In the same breath, I also sincerely hope that HR will view their role in a different light. HR is often the first point of contact for the staff in dealing with higher management. Inevitably, HR is viewed as the gatekeeper of the higher management and trust becomes an issue. HR should be seen on the ground with the staff. Be with them, lunch with them. Be visible and be at close range.

It was never easy for the HR and it will never be with a workforce diversity that is mind-boggling. But don't for a moment negate the functions of HR. Companies will have to do that at their on peril.

Organizational DNA

Last week, I was with 2 groups of some of the most eager learners I have ever known. They are from a company that is the guardian to one of Malaysia's most loved brands : Jaya Jusco. I salutue you, the great people of AEON Malaysia.

This entry is for you guys and I hope to discuss further the story of Nanjing Automobile Company.

As I said the true blue British brand, MG and Rover is now owned by a relatively new and unknown entity called the Nanjing Automobile Company. They may be big in China but as you guys said rightly : Nanjing who?

Do you also know that Europe's steel powerhouse now belongs to a certain Mittal from India who makes England his home? Or did you know that Tata of India is considering to buy another British icon, the Jaguar. Full circle indeed.

The question is this : How old are these target companies. Very old is the answer. They have gone through 2 world wars, numerous political, social and economic revolutions. They have witnessed some of the most dramatic changes in consumerism's relentless changes in tastes and trends. AND, they have always been under the guardianship of one culture. Today, entirely different cultures are thier new owners. I mean, Rover a Chinese owned company or Jaguar an Indain owned one? Well, thats the way of the world today folks. But, what happens next. To be more precise, what will happen to the DNA of these organizations. Will people look at them as still Rover or MG or will they look at it differently? Will their loyal Anglo-proud customers feel betrayed? Will the new owners have the discipline not to re-engineer the DNA of these organizations? What happens if they do? What happens if they don't?
What will happen to the brand's intrinsic value and characteristics?

Will they survive another 100 years?

I believe that an organization too has a certain DNA that keeps it evolving. This DNA becomes entrenched over time and it becomes something buried deep in the heart of the organization which in turn affects how it does business. Look at Honda. What do you think it's DNA like? One of creativity and innovation before profit? Yes. Otherwise they would not have been spending billions of dollars developing the Honda jet. Now, what will happen to this DNA if a purely business investor from Russia buys over Honda? Would Honda stop evolving? Would its DNA face a slow and steady remodification?

So many questions. I am going to sleep on them and probably keep the answers for another entry.

By the way, after our last session, a thought flashed through my mind: Isn't it strange that Seiko and Alba have not bought over any Swiss brands? Or have they?

Do Engineers Need Management Skills Training?

It was great to be back at Maju Holdings. As in all previous occasions when I had the good fortune to meet the staff of Maju in my training programs, last week's group did not fail my expectations. They were energetic, lively and passionate. The highly technical and tough issue of Managing Change was discussed and debated in a open and professional manner. Syabas ladies and gentleman of Maju! One of the issues that we discussed was whether an engineer who has been made to be a manager need to go for management skills training? If you recall, that's what MBAs were created for isn't it? The very first MBAs were in response to demands from manufacturing companies in the US and Europe that were slowly experiencing leadership change. At that time, the founders and/or original movers of some of the most well known organizations were gradually being replaced by their long time staffs who for the most part were involved directly in the manufacturing/product component of the business. It appeared perfectly logical for Henry Ford, for example, to designate his chief technical men or his chief engineers to take over some of the key positions in the company. After all who better to run the company than the guys who knew the product like the back of their hands? Once these technical wizards ascended the power structure of their respective organizations, they inevitably realized that managing a group of production workers as the CEO or GM was a completely different ball game compared to managing the day-to-day running of the production line. They needed much more than their technical expertise. Hence, the MBAs were developed as a bridging for them to enter the world of management. Of course, over the years the MBAs have taken on an entirely different appearance. So, the answer is yes. Engineers and other technical experts going into management functions should be exposed to management skills training. It should be something that they experience way before they take the hot seat not after the fact. That way, they will have more time to internalize and find their footing before actually taking on the real responsibilities of a manager.