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The
Danger of Confusing
Spin With Strategy
By Patrick Di Chiro
President and CEO, THUNDER FACTORY, Inc.
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In the numerous post mortems that followed the bursting
of the Internet bubble (It didn't "change everything"
after all), one factor was usually overlooked as being
key to the Net economy's demise: The fact that management,
investors and industry pundits too frequently confused
"spin" with "strategy."
This is nothing new for marketers, who have been confusing
spin with strategy for many years now.
There is a world of difference between spin and strategy.
Spin is about superficial trends, "buzz," nonexistent
planning, very little focus, and continual changes in
direction. Strategy is based on rigorous planning, long-term
value, making the hard decisions, focusing like a laser
beam, and consistency over time.
In recent years, marketers have been increasingly satisfied
with taking the strategic path of least resistance - they
have been adopting spin tactics rather than doing the
hard work to come up with a strategy.
One doesn't have to look too broadly to discover some
poignant examples of how spin has permeated every aspect
of our business and marketing thinking.
Marketing's 30-Year Spin Cycle
Some would argue that the entire Internet economy was
a triumph of spin over strategy. Clearly, it was not our
finest hour as marketers. It was a time when spin virtually
replaced strategy. A time when marketers actually believed
that you could "build a brand" by blowing half your annual
marketing budget on one Super Bowl commercial. Or, by
getting your CEO mentioned a few times in the now defunct
and forgotten Industry Standard.
Michael E. Porter, the Harvard Business School professor,
who is one of the world's foremost thinkers on business
strategy, discussed the decline in the use of strategy
in a March 2001 Harvard Business Review article
entitled, "Strategy and the Internet." Porter commented:
"Many of the pioneers of Internet business, both dot-coms
and established companies, have competed in ways that
violate every precept of good strategy. Rather than focus
on profits, they have sought to maximize revenue and market
share at all costs, pursuing customers indiscriminately
through discounting, giveaways, promotions, channel incentives,
and heavy advertising."
The truth is that marketers began emphasizing spin over
strategy long before anyone had ever heard of the term
"first mover advantage." The seeds of this trend were
planted in the 1960's, during the first major creative
revolution in the advertising/marketing industry. This
period is rightfully characterized by many as a Renaissance
in the advertising business. It brought intelligence,
light and humor to a business that too often treated consumers
as if they were idiots.
But, there was a dark side to this creative enlightenment.
The positive changes of the '60s led to a second creative
revolution in the 1970's. Born in San Francisco and L.A,
the second creative revolution is best known by its oft-repeated
mantra, "It's all about the work."
The "work" stood for the creative output, which itself
became the hero and the end game. Not the product, or
the client, and certainly not the marketing strategy.
In this new spin-focused approach to marketing, the primary
goal was to entertain and impress. Selling and building
strong, value based relationships with customers and other
stakeholders took a back seat.
To be sure, strong creative is a fundamental part of good
strategic execution. Effective strategy engages customers,
keeps their attention so you can deliver a persuasive
message, and hopefully changes their behavior in a positive
way. You cannot accomplish that by boring people. But,
a marketing-advertising approach that principally emphasizes
entertainment, mind share and buzz, is not destined to
build long-term success. And definitely not profits. That
takes strategy, not spin.
Spinning a "Press Release-a-Day"
At the height of the Internet craze, CEOs of hot public
dot coms were known to instruct their marketing and communications
staffs to issue a "press release-a-day." They believed
that the quantity, not necessarily quality, of these releases
would create the impression that their companies were
dynamic, growing and successful. Never mind that the vast
majority of their releases had no value whatsoever. In
fact, a common complaint amongst Wall Street analysts
and reporters was that the only thing these companies
were winning was the "press release war."
The dot com CEOs readily admitted that their daily press
release edicts were solely about spin, and had nothing
to do with business strategy. But they adamantly stuck
to this practice because they believed it generated the
desired results - boosting their stock prices and creating
the all-important buzz.
The real problem for these Internet companies and their
shareholders was that their buzz-loving CEOs ultimately
confused spin with strategy. CNBC was crowded everyday
with glib CEOs who exhibited a dangerous habit of seizing
the trend du jour and promoting it with an almost religious
fervor. Their strategic zig zagging not only hurt productivity,
competitiveness and employee morale, it wasted a huge
amount of money in the process. Shareholder value quickly
went out the window.
Several of these CEOs continue to confuse their spinning
with having a real strategy. Evidently, they are hoping
they can attract a buyer before their companies simply
collapse from too much spin.
Strategy Edges out Spin in Presidential Politics
The term spin was actually coined in the political realm,
and it has been enthusiastically practiced there ever
since. The original "spinmeisters" were the political
operatives who tried to gain competitive advantage for
their clients by devising poll-driven messages - and even
policies -- that purported to tell voters what they wanted
to hear.
The good news is that strategy still does win the day,
even in the spin-centric political world. Leaving aside
the controversies of the 2000 presidential race, few would
disagree that then Governor George W. Bush won the strategy
war of the campaign. Many believe that Vice President
Al Gore lost by his over reliance on spin.
From the beginning of his campaign, Bush established a
clear strategy and deceptively simple messages to communicate
his positions. He then did something that seems almost
revolutionary these days: He consistently stuck to them
throughout the campaign.
Whether or not you agreed with candidate Bush, you knew
where he stood. More importantly, his steadfast adherence
to his strategy and messages painted the picture of a
disciplined, straight talking and even principled politician.
One who knew what he wanted to do, and where he would
lead the country.
In stark contrast, Vice President Gore was all over the
map in campaign 2000. He constantly changed his strategy,
and key messages, and thus reinforced a perception that
he was just another superficial politician who did not
really have any guiding principles. Someone who would
"do or say anything to get elected." As such, whether
by design or through lack of discipline, Vice President
Gore's campaign was essentially run on spin, not a core
strategy. The final result reinforced again the power
of strategy over spin.
Sparking a New Strategy Revolution
What the marketing industry needs today is a new strategy
revolution. In this revolution, the "work" would serve
to support the strategy, not the other way around. Spin
would just be another tactic in a comprehensive strategic
plan. Like the original creative revolution of the '60s,
this new strategy revolution would reclaim the true business-building
legacy of the marketing profession. It would be built
on the following strategic marketing tenets, all pillars
of proven business strategy:
- Make the Tough Choices - Strategy is not about
doing everything - it's about making hard choices
and trade-offs, that differentiate and help drive
competitive advantage.
- Focus on Profitability - Growth, market-share
and mind-share are all great, but, without profits,
businesses die. Marketers must develop strategies
that drive the bottom-line as well as the top-line.
- Deliver Real Value - This should be tattooed
on every marketer! If you develop and deliver a product
and an experience that has real value, you can charge
a fair price for it. That helps to build brands, and
leads to profits and success. It has nothing to do
with spin.
- Listen to the Customer - This seems self
evident, but it's forgotten all too frequently. Building
an effective marketing strategy is, first and foremost,
a bottom's up process, not top down. Learn first what
your customers really want and need, and then plan
from there.
- Define Your Unique Value Proposition - The
essence of strategy involves developing a differentiated
value proposition that drives competitive advantage.
If you're having problems doing so, start over. No
amount of spin, or marketing budget, will take the
place of a strong value proposition.
- Be Consistent - As marketers we all know that
brands are earned over time. They are not bought -
even with expensive advertising campaigns. But, that
doesn't stop marketers from trying. To succeed in
the long run, you've got to take the time and do the
hard work to build a strategy, and then stick to it.
Great companies know that lasting business success comes
from having a strategy that is refined, reinforced and
followed consistently. If you are willing to do the hard
strategic work - and avoid the pitfalls of confusing spin
with strategy - you too can build a business franchise
that stands the test of time and competition. |
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