The Manager's View provides solutions and advice based on management and marketing principles that are used by GWR Research (www.gwrresearch.com). Many of the posts are related to or are taken from the author's books "The Manager's Guide to Building a Successful Business" and "Developing Successful Marketing Strategies". More information on the books is available at Amazon.com, BarnesandNoble.com or Businessexpertpress.com
How Do I Change the Culture in My Organization?
Tie Culture Change to
By Gary Randazzo
As a manager you may find that your organization has flaws that are hampering performance. These flaws may have become a “hard wired” part
of the organization’s culture and to move the organization forward you need to
shift or remake the culture.
Larry Bossidy, former chairman of Honeywell International,
writes that most organizations attempts to change culture fail because they are
not tied to improving business outcomes.
Culture is the result of management practices and philosophy
that is developed over time. Everyone in the organization knows the culture and
most abide by the attitudes and approaches that define the path to success in
I can recall working in a very successful, very large newspaper
organization that was entering into the commercial printing business. They were
making some headway but not the kind of growth they had envisioned.
The newspaper was located in a big city and the commercial printing
opportunities were significant. One challenge was the presses owned by the newspaper.
The presses that printed the newspaper used the letterpress process, which
didn’t produce the quality provided by the offset process used by commercial
printers. To address this the newspaper purchased a printing company that had heat
set offset printing presses. This not only provided offset printing it allowed
even higher (near magazine) quality printing.
While this provided an advantage, this printing press was
only economically viable for large press runs. This limited the ability to sell
smaller print jobs. To address this the newspaper used smaller commercial
printers to print the jobs sold by the newspaper’s sales staff.
This is where culture got in the way. The newspaper had an
approved list of two or three outside printing vendors that could be used.
These printers had long standing relationships with the newspaper. Their prices
were well above market prices thereby limiting the sales to those in desperate
need or who were not knowledgeable of printing prices. At times, the newspaper
would bundle advertising with printing and discount the advertising to offset cost
of the printing. Since the newspaper was the primary advertising vehicle at the
time, this approach generated a respectable amount of revenue but provided less
profit than just selling advertising.1
This approach was the result of a culture that emphasized
the newspaper’s leadership position in the marketplace. Basically, it said to
staff and ultimately to the market that the newspaper set the rules, not the
marketplace. All too often a request made by a customer was simply turned away
due to lack of capacity or inability to meet the customer’s needs.
There is a huge chasm between identifying the need for a
cultural shift and actually causing a cultural shift. We knew we needed to
change because there was a lot of business that was going to competitors. We
were primarily concerned with winning back grocery advertisers that used to
insert their circulars in the newspaper but had moved to the mail. In so doing grocers
had found printing vendors would give them high quality printing, low prices
and good production support.To
move forward we would have to significantly change our culture to one that was
focused on the customer.
Clearly, the only way we were going to change culture was to
have a significantly positive business outcome directly related to a change
favoring a focus on customer service.
We were fortunate that circumstances arose that allowed us
to test the water a bit. We sold a very large contract that required the use of
new outside services. A Vice President showed his displeasure and lobbied to
use the old approach. Using the old approach however, would mean cancelling a
very profitable, multimillion-dollar contract. It was ultimately decided that it
was in the company’s best interest to fulfill the contract. This opened the
door to try this approach on several other advertisers.
Over the next year or so our commercial printing revenues
doubled and our profits improved at an even higher rate. More importantly we
were able to position ourselves as a provider that could meet virtually any
As an example, late one Monday morning we received a frantic
call from one of our largest advertisers that they needed a circular delivered
by mail and it needed to be in consumers mailboxes by that Thursday. We said
that it wouldn’t be a problem, just tell us where we needed to pick up the
circulars and we would deliver them to the Post Office.
She told us that the circulars hadn’t been printed. We said
it might be a little more difficult but we would drop by and pick up the
artwork. She then told us that the artwork wasn’t ready. Further, when we sent
a production manager to collect materials as they were produced we found that scanning
the artwork was slowing the process.
The production manager called one of the printing vendors
and alerted them of the situation. Scanning was dropped in favor of a flatbed
camera.This and a few other
production process changes allowed us to get the customer’s circular into their
customers’ mailboxes on that Thursday.
This kind of service led to the ability to advise customers
on all of their advertising and ad production needs. We found ourselves
providing photography services, digital imaging services and direct mail
By tying the needed change directly to business outcomes,
the newspaper was able to change its culture from one focused on past practices
to one focused on customer needs.
When introducing a new product or service to the market a
key, and often critical, consideration is the price for this offering. I have
seen folks simply take the cost of production and use a percent mark up as a
pricing model. This is the simplest model and it provides a good example for
the need to consider other pricing model options.
Here are 10 things to consider before setting a price for
your product or service: ·Mark up
Based on Cost Vs Retail. In the opening paragraph I gave the example of a
model being used that marked up a product by a percent over the cost. The cost
used here is generally direct cost or labor and materials. If someone wants a
30% of the asking price to be the mark up, then using 30% of cost won’t provide the
desired outcome. Simply put, it is the wrong math. If something costs $1 to
make and it is marked up by 30% for a selling price of $1.30 then the profit of
based on the asking price is 23.07%. To arrive at a 30% mark up based on the
selling price it is…
THE IMPORTANCE OF PRODUCT PRICING By
Gary Randazzo The impact of pricing
strategies can be critical for the success of new product launches, a company’s
image and ultimately a company’s short and long-term success. REACTING TO THE COMPETITION I have worked in
several industries and found that pricing is often overlooked as a key
marketing tool. In many instances pricing is driven by the sales department and
is a reaction to the competition. This reaction assumes the competition knows
the market better and has a superior marketing strategy. When reacting to
the competition it is important to understand that you are being drawn into a
game whereby you play by the competitor’s rules. You are playing their game and
changing your strategy. Your hope here is that you can play the game better or
that the competitors can’t play their own game very well. I am reminded of
a time where my company was vying for the business of a key customer. The
customer was a shrewd negotiator. We understood the valu…
TO CLARIFY YOUR MARKETING STRATEGY, START CLASSIFYING YOUR CUSTOMERS
From Texas CEO Magazine, December 2012
By Gary Randazzo
Every business, at some point, will review its marketing strategy. The cause for a strategy review can come from a difficult business environment, a windfall in profits, a change in technology or a change in customer preferences. When a marketing strategy review is in order it can be challenging to decide where to start.
Classifying customers, based on the amount of their spending, can be a good place to begin. Spending used as a metric can help the analyst understand which customers provide the biggest impact:
1) Key customers representing the largest percentage of sales and profit
2) Customers with the potential to provide greater sales (under-potential)
3) Customers that do little or no business with the organization but use products similar to those offered by the organization (nonusers)
This simple classification may…