Archive for McKinsey

Feeling Safe: A Good Boss Watches Your Back

[tweetmeme]A couple of recent studies confirm that one of our most primal needs is safety.  We want to feel safe – at home, in our city’s streets and especially at the office.  Reuters came out with a report today that ranked cities on how safe they are for children.  I’m proud to say that my hometown, New York City, ranked first along with Louisville.

"Feeling safe -- he's got their backs"

Feeling safe -- he's got their backs

Another study by McKinsey this past summer discussed the importance of a boss making his employees feel psychologically safe by watching their backs.  This intrigued me because feeling safe isn’t usually found on the wish list of employees.  A good salary, a secure job (maybe that does equate with safety), meaningful work and a sense of community usually rank high.

So why is it important for a boss to “watch your back” and provide psychological safety?   According to the McKinsey study, “Why good bosses tune in to their people, “Good bosses spark imagination and encourage learning by creating a safety zone where people can talk about half-baked ideas, test them, and even make big mistakes without fear of ridicule, punishment, or ostracism.”

An Absence of Safety Can be Deadly

An absence of psychological safety, in concert with fear of the boss, can be dangerous or downright deadly….one study showed that when pilots faked mild incapacitation toward the end of a rough and rainy simulated flight, their copilots failed to take the controls 25 percent of the time—resulting in simulated crashes.

To lock in your team’s loyalty, boldly defend their backs, says the study’s author Stanford management professor Bob Sutton.

Fear Stifles Creativity and Productivity

Who wants to take a chance and suggest a new way of doing something and risk the wrath of the boss?  Says Sutton, “The best bosses invent, borrow, and implement ways to reduce the mental and emotional load heaped on their followers — followers who enjoy such protection have the freedom to take risks and try new things.”

Fear can be a motivator – of the wrong kind of behavior.  A fearful employee keeps his head down, does what he’s told and expected to do but rarely ventures out on the edge of the board.  I once worked for a CEO who screamed and tossed ashtrays.  He even resented the clack of his secretary’s fingers on the keyboard.  Do you think anyone voluntarily went to his office with a new idea?  Not on your life.

Word of Mouth (WOM) is Hot. Or, the More Things Change, the More They Stay the Same

Word of Mouth (WOM) marketing is the newest buzzword, so it seems. Michael Stelzner devoted a column to it in Social Media Examiner today when reviewing location-based social networks like Foursquare.  And no less an authority than McKinsey, the consulting firm, has carried two articles about WOM in recent months.

Social networks are providing a natural platform for marketers to try out coupons, contests and giveaways to generate buzz and sales. You’d think that they had invented something brand new.

Word of Mouth (WOM) the new buzzword

I’d like to take this opportunity to pay tribute to the woman who virtually invented WOM, or viral marketing, way before the Internet enabled legions of communities on Twitter and Facebook to spread news around the world at the speed of sound.

Viral Marketing

In the 1980s, Linda Pezzano got the assignment to promote an obscure board game, called Trivial Pursuit. Linda was a friend, and before her untimely death in 1999, she showed me a presentation that she gave at marketing forums about how she reinvented the way games are marketed through viral marketing. Selchow & Righter, which bought the rights from the Canadian inventor, couldn’t afford traditional advertising. On a PR budget of $40,000 (about $88,000 today), Linda developed a program that generated sales of 1 million sets in the first year – an astounding and unimaginable number – without a penny spent on advertising.

The Story of How She Did It

What she did then is commonplace now, so let me tell you the story of how she did it. Linda convinced the company to let her send the game to the 70+ Hollywood stars mentioned in the game, such as Gregory Peck, James Mason and Pat Boone who liked playing it so much they sent her letters of thanks, which she then proceeded to use in her promotions.

She also sent teaser mailings to 1,800 top buyers who would be attending the industry’s major trade show, the 1983 New York Toy Fair. Then she sent sets to radio talk show hosts and staged game-playing events at parks, bars, restaurants and ski clubs to get WOM going. The rest, as they say, is history, with Trivial Pursuit becoming one of the most successful board games ever launched.

I just want to point out that many of the marketing techniques in use today in social media aren’t new. We are standing on the shoulders of pioneers like Linda Pezzano, in viral marketing, John Caples in direct marketing, and Edward L. Bernays, long recognized as the “father of public relations.”  They achieved great things without the Internet, proving that original ideas are still the currency of successful marketing campaigns.

Turning Customers into Your Company’s Brand Advocates

[tweetmeme]Customers can become valuable brand advocates for your products and services, according to a McKinsey study.  I’m a firm believer that companies can leverage their own employees on social networks to advocate for their brands and I’ve written about that.  But the McKinsey study,  “Four ways to get more value from digital marketing,” is convincing in its point of view that traditional advertising and point-of-sale promotions, one-way channels to customers, are losing potency to the power of interactive communications with customers who then become your brand advocates.

Viral marketing gains new customers

Not surprising.  “Moving from a one-way, company-driven sales mentality to a two-way relationship with consumers requires core changes in the way marketers do business,” the study learned.  Digital technology has changed the way consumers make purchasing decisions.  Instead of asking friends and families for recommendations, consumers now read online reviews, compare features and prices on websites and discuss options on social networking sites.  This is a golden opportunity for companies to find out what customers are looking for and to respond to their needs directly one-to-one.

“Marketing to the One”

The term “marketing to the one” became a buzzword a few years back.  But now it has become a reality.  Among leading companies that have leveraged this two-way conversation are Comcast, Dell and American Express.  They constantly monitor what their customers are saying about their products and service. Smart companies are also revamping their websites and launching online promotions that engage their customers in a way that was impossible just a short time ago.

But most companies are, unfortunately, still mired in their old ways, spending most of their marketing spend on paid advertising reaching the many.  Digital marketers reverse this, focusing on a smaller core of engaged people who spread their message.

Inspiring customers to help stretch your marketing budgets

Back to customers as brand advocates.   Digital marketers let “customers do more of the heavy lifting as they decide what to look at, play with content and forward it to their online communities,” says McKinsey. I would call them brand advocates for the companies that treat them well and provide outstanding products and service.

Gary Vaynerchuk

Gary Vaynerchuk, in his book “Crush It,” offers a powerful example of the effectiveness of viral marketing.  For his wine business, he spent $7,500 to offer free shipping codes via three traditional advertising channels:  a billboard on the New Jersey Turnpike, direct mail, and radio.  The billboard brought in 170 orders, radio 240, and direct mail 300+.  Then, at no cost, he sent out a free shipping code via his Twitter account and received 1,700 orders in 48 hours.  No doubt, many of his followers retweeted the offer to their friends.  They became brand advocates for winelibrary.com.

Is your company engaging your employees and customers as brand advocates?  I would love to hear your stories.