Treating Employees as Sources of Growth vs. as Costs to be Minimized
Recently, I spent some time in Manhattan. This was after a long absence since my Business School and McKinsey days in the late 1980s. I had been asked to head up marketing for a private equity-owned security software startup as its Chief Marketing Officer. I was eager to go to Manhattan. I remembered how advanced New York City had been compared to the rest of the world nearly 30 years ago. I was looking forward to getting up close again to the leading edge of American business.
However, over time, it became clear that the finance and efficiency-dominated mental frameworks that still seem to guide managerial instincts and decision making in Manhattan, have slowed down its pace of innovation. This was especially true when compared to the growth and innovative leadership styles that have, in the meantime, emerged in Silicon Valley.
There were tangible differences from the start. First of all, it was difficult finding employees with the right skillset to use modern, cloud-based business management tools. Secondly, there was a lack of familiarity with new lead generation methods including nurture marketing or account based marketing across the organization. There were other differences too—more subtle perhaps, but still very important. In Silicon Valley, there is emphasis on independence of employees and their empowerment to be problem solvers, whereas in New York, I realized that there seems to be a structured top-down approach with employees following tightly defined management directives.
I’m not trying to position this blog into a mouthpiece for political ideologies. But these trends are worth pointing out because emerging marketing technologies are outpacing outdated management models. This is analogous to what happened with the manufacturing quality revolution that returned to the USA from Japan in the 1980s. It resulted in a necessary overhaul of motivational management styles to encourage employees to not just perform tasks but do them well.
Modern marketing methods like account based marketing rely on employees entering data accurately, reporting outcomes transparently and truthfully, and constantly tuning marketing campaigns to optimize their performance. However, in a top down approach where employees are worried about getting laid off or not receiving approval from their managers, they will often not provide the data necessary to make the right decisions. In these environments, employees are often hesitant to share ideas that could help optimize marketing campaigns and associated analytics, which contribute to a high velocity, rapidly growing opportunity pipeline.
If you see employees as sources of innovation and the providers of new solutions to problems, you will give them access to all data and tools needed and tap into their technical expertise and instincts for what marketing techniques work in the market place.
If your management style is more top down, then you’ll run the risk that they won’t tell you what you need to hear because they’re concerned that you might not want to hear the truth or that they could get in trouble. In the latter mindset, the company is more likely to view employees as cost centers that need to be managed and kept in check, because their sole contribution is to execute tasks, but not be consulted for their intellectual contribution and innovative thoughts.
Whether employees are seen as cost centers or as sources of growth has massive implications:
Empower autonomous decision making vs. enforcing directive management
- More brain power: In the empowered model, all the employees’ are thinking and coming up with solutions vs. just the executive staff. What’s the impact? More Bottom-up ideation and faster resolution of problems. With technologies like cloud based management systems or social media networks, the younger, more junior employees will be the ones knowing how to leverage them. If they keep silent, the organization loses out.
- Upside down pyramid: In the empowered model, management sets the overall goals and budgets, then asks the employees to put the plans together to achieve those goals. Management’s role then shifts to deliver needed resources and remove obstacles, and counsels as needed to accommodate budgetary or political realities.
- CEO commitment: If the CEO does not value analytics and transparency then modern, analytical marketing techniques are doomed to fail. The CEO needs to step up to this responsibility to leverage all the dashboards, analytics and real-time data the new marketing systems provide.
Drive needed cultural changes
- Celebrate corrective action: In a a complex lead generation environment that depends on leads coming through a multitude of channels like social, email, events, web traffic, or advertising, and that hinges on timely and accurate analytics, failure must be tolerated. At the onset of a new marketing initiative, no one will know what messaging, formats or channels will work, and thus everyone should be willing to shut down non-performing campaigns in favor of the ones that do perform. To that effect, management needs to define and fund the tools with which the employees can measure and improve their own department’s performance.
- Encourage risk taking: The entire system depends on trying new ideas. We used to rent latte machines for our events to drive traffic to our booth; even though the expense was significant, we tripled our lead volume through the booth from one year to the next. The same is true for new content pieces, messaging, or campaigns. Employees worried about getting tainted by failure will not initiate this needed experimentation.
- High ego vs. low ego: In a data-driven, fact-based organization there is no room for “because I said so” behaviors. The entire system depends on collecting data and accurately reporting on the conclusions that data drives. If politics or egos get in the way of accurate reporting, management will operate blind to the facts of what goes on at the frontline because data is withheld from them.
New kinds of employees:
- Hire self-motivated, self-starters: The entire philosophy of giving employees the tools to monitor their own work and their department’s performance only works if they can report bad news, as we described above, but they also need to be motivated to proactively find their own problems and improvement opportunities. Management needs to provide the tools and the culture for that to happen, but the employees need to seize the moment and truthfully drive the needed actions and analyses.
- Non-political problem solvers: We have written about the challenges of getting sales and marketing to work together, and especially during the ramp-up phases when marketing spends lots of money and no leads are flowing, the same can apply to marketing and finance. In a data-driven, transparent culture, management needs to constantly strive to eliminate political or manipulative behaviors because they are anathema to truth in reporting.
- Need to be detoxed from earlier experiences: I have always been amazed at how long it takes to get employees to trust that they will not be punished for reporting their mistakes, or for identifying improvement opportunities. Or for not supporting their management’s ideas, even if those ideas are outdated or bad. If someone has had past, bad management experiences, they may well be reluctant to contribute proactively and openly to the kinds of transparent analytics machine we have been talking about. If that’s the case, their trust needs to be earned so they begin to share the facts needed to optimize the lead machine.
Modern marketing machines with the associated real-time analytics are works of art. The upsides are motivated employees, high productivity, and faster and better innovation in the pursuit of rapidly growing pipelines.
There are no alternatives to efficiently and effectively leveraging these modern marketing and analytics approaches. We believe that the above dynamic is a contributor to the relative lack of innovation in certain sectors of the US economy: Distrust between management / investors and employees result in modern analytics tools and marketing methods to remain underutilized. As with the quality revolution of the 1980s, today’s innovation requires empowered employees who can be sources of growth. Autocratic or non-empowering management styles fail to leverage those technologies.
For some more reading, here are two relevant blogs on a related phenomenon, “Digital Taylorism”: