All that glitters is not gold

tmatulis    March 1, 2015

Drucker

Sometime in the last 50 years this quote emerged and arguably has become religion for many in business and across different organizations.  In fact I can remember the exact instance when, as a young engineer starting out in my career, I first heard this stated as if it came down from the mountain carried by Moses.   I also remember nodding in agreement.

Now with decades of experience between me and then I am surprised by how enigmatic and incomplete it has come to sound to me.  In fact I think the back story might offer some important insights, that there is more to it than meets the eye.  Did Drucker even say it, and if not who did?  Is it really such a simple truth, or what else needs to be added to the story?  So let’s do some detective work.

It appears likely that this basic statement linking  measurement and management emerged after the famous business management guru Peter Drucker published his 1954 book The Practice of Management  that popularized the concept of Management by Objectives (MBO).  In simple terms MBO aims to align and set corporate objectives across all levels and groups within an organization, and to determine the approach for monitoring progress.  It is not surprising then that measurement would become a key ingredient in the mix of MBO applied across some or many different scenarios.  The question I believe is whether it should be the dominant ingredient?   What might compete with it?  What is actually more important?

So did Peter Drucker actually say or write this about measurement?  This is a minor mystery as there can be no certainty either way.  On the other hand there is some good evidence that he would have found the expression simplistic and incomplete.  In fact in his 1973 book, “Management Tasks, Responsibilities, Practices”, Drucker contrasts and differentiates between measuring a line worker’s productivity, parts produced per hour for example, how many rejected parts, and so on, with the productivity of a design department developing product designs that do not attain any sales.  He goes on to examine questions relating to environmental factors,  productivity of capital and systems of measures that may offer true insight.

This brings me to another story that helps explore this little mystery further.  Edwards Deming, a contemporary of Drucker’s and arguably as famous for his ideas around management and quality, helped the Japanese automotive industry emerge from WWII with the dominant and most powerful business model of the last 50 or so years.  Known as a real ‘numbers guy’, there are suspicions and even random references that attribute the measurement expression to Deming.  In fact he believed the opposite and said so.

'You'll find the UK down there!'

Deming distilled his thinking into a list of 14 philosophical principles for management, several of which call out the dangers of targeting measurement, and in one case clearly guides in the opposite direction, ‘Eliminate work standards (quotas) on the factory floor. Substitute leadership.  Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.’   I also find it insightful and delightful that another of Deming’s most important points was to ‘Eliminate the use of slogans’.

Deming and Drucker both believed in Systems Thinking long before there was much awareness or published theory on the topic.   As such their focus was on understanding systems and the surrounding domains, the moving parts in other words.  They recognized that measurements were at best snapshots of a constantly changing reality.

I appreciate this perspective for at least two reasons.  Firstly, what should be measured, and how, changes and evolves constantly and without warning.  Spend too much time and dependency on measures and you risk being left with little of value.  Think of political polls and economic predictions as examples of the poor predictive powers of measures and metrics.  The second reason mirrors the first.  Understand your customer, align effective leadership with the changing challenges faced, deliver value, quality, and performance, for these factors do not change – hardly ever.

If this line of thinking intrigues you watch the following two videos by respected industry pros and consider how different their messages are.  Each is about 10 minutes long.

This week I aim to consider how metrics fit into the overall strategy for leveraging social media.  The internet can offer overwhelming levels of analytics and many approaches to addressing metrics.  This situation offers opportunities for success, and for a lot of effort wasted capturing and interpreting data, and failing to prove the connection between investment and the returns.  As Deming and Drucker might be expected to warn, understand the purpose you have, design and test business and operating models that best suit your needs, and integrate measurements as they make sense to your goals.

I also want to take a specific focus in this post, to view the issue of social media and metrics through the eyes of what constitutes the vast majority Canadian companies, so-called SMEs (small- to medium-sized enterprises) .

SMEs

Source – http://www.ic.gc.ca/eic/site/061.nsf/eng/02805.html

It is easy to forget that something like 98% of private companies in Canada employ fewer than 500 people, and 70% of all working Canadians work for firms with 99 or fewer employees.  So while there are many interesting stories and instructive cases of how Canadian banks and Telcos leverage social media the reality is that most people at most companies see social media as a potential time suck with a budget dangling on the end of a shoe-string.

Marketing Sherpa is a great source for articles and blog posts that dive a bit deeper and provide insights and analysis of how practices and trends play out in the real world.  I came across a post from several years ago that provides a framework that I believe speaks to SMEs.

Phase Matrix 1

No doubt the point departure within this matrix will vary as some small firms may be very effective in their social media strategies.  Nevertheless the phased matrix that Jonathan Greene offers up provides a great starting point for an SME to position itself within the broader context, and where to go next.

Many anecdotes and observations lead me to believe that a significant proportion of SMEs, and even larger companies, are stuck with web presences based on what was adequate 5, 10 , even 15 years ago.  No sense of strategy or purpose, sites littered with evidence of neglect – 5 years without a news entry or blog post.  Viewing the challenge through the eyes of an ‘average’ SME then I propose my own modified version of Jonathan’s table as follows.

Matrix 2

The link between SMEs and social media is a bit of a mystery in itself.  Fortunately there are examples that cast some practical perspective on what is going on.

Gravity Defyer (GD) offers a unique if not slightly gimmicky product line, essentially high tech shoes available in most styles, from jogging to lace up dress style.  The key feature is a spring mechanism in the heel that ‘stops trouble on impact’.

As a direct response marketer GD resembles many smaller firms who depend on e-commerce to complement a limited network of retailers or alternate channels.  Their bottom-line requires quickly converting prospects into sales – show the product and then hope they click the buy button.  The potential limitations of this approach are obvious – low conversion rates, limited touch to convert visitors who hesitate, limited demographics.

Using our phased matrix GD probably sits in phase 2 as it has a strong conventional web presence and uses social media to engage customers, build some brand awareness, provide services and address concerns.

Starting in 2013 they identified the objective of accessing broader audiences and new demographics as key next steps.  They elect to focus on fully leveraging their Facebook presence.  Here is what they did.

  1. Expanded Facebook ads coupled with running 4 distinct campaigns simultaneously, changed out monthly.  They measure the campaigns’ effectiveness through core metrics, to learn what works and maybe what does not.
  2. Organic content is developed and released to coordinate with news releases and other marketing activities on Facebook.  Again performance and conversion metrics are tracked to learn what works and where.
  3. They engage affiliates such as bloggers to write reviews and feature products.  The affiliates are selected to cover different target audiences, both large and niche audiences.  Traction across different scenarios is measured.
  4. A/B testing is utilized to test what creates better traction, particularly in ads where triggers for new demographics are important.
  5. Finally they practice internal alignment.  All departments are engaged to play a role and help direct the process as it evolves.

So in making well designed additions and changes to their on-line strategy, GD shows how a set of key initiatives can generate hoped-for results.   Since fully implementing the expanded Facebook strategy into its marketing efforts in 2013, GD doubled its attributable revenues in just 10 months.   ROIs for campaigns have ranged between 300% to 600%. Specific metrics were used to determine what worked better and which variables had stronger influence.  Gravity Defyers succeeded because it executed an effective plan, not because pf its ability to manage metrics.

As of February 2015 GD has been contacted by Facebook to film a case study video to feature Gravity Defyer on the Facebook company testimonials page.

Lessons for SMEs

  1. Emphasize developing the best possible plan based on goals and resources
    There will never be enough time and resources to accomplish what major companies can.  Understand where you need to get to to generate a tangible positive result, what that future state looks like, how to get there, and what it will cost.  Add metrics as you identify their value.
  2. You can’t cheat on the basics
    If you have done very little on-line you need to acknowledge why this is the case.  Have you tried and failed?  What is different this time that you think the outcome will be different?

Submitted by:  Tmatulis

To contact the author of this entry please email at:  gtmatulis@gmail.com – U of W, Social Media for Business Performance students

If you have concerns as to the accuracy of anything posted on this site please send your concerns to Peter Carr, Programme Director, Social Media for Business Performance.