Business

Saturday December 20, 2008

Becoming a change agent

By M. HAFIDZ MAHPAR


IN the eight years that he was Procter & Gamble global marketing officer, Jim Stengel helped make the consumer products giant one of the world’s most respected marketing companies.

The 53-year-old retired on Oct 31 and opened his own consultancy, Jim Stengel LLC, in the hope of making an even bigger impact.

“The ideal of my new company is to be a change agent and a catalyst to help others raise the level of their marketing performance,” he tells StarBizWeek in an interview.

Stengel, in Kuala Lumpur recently to speak at the Global Brand Forum, doesn’t seem worried that he is starting his outfit during turbulent times. In fact, he thinks it’s a great time to build a brand.

“Marketing is needed more than ever in a recession,” Stengel explains. “What’s happening is, people are not confident, and I think marketing can stimulate confidence. It can stimulate great ideas. That’s why I shared (at the forum) the examples of AirAsia, Google and Apple, all launched in a recession.

“A second reason is, when things get tough, people are open to change – open to trying new things. And I think that gives me an interesting time for people to consider changing things which they might not consider changing two years ago.” Asked whether P&G, the world’s biggest advertiser, reduced its budget during a recession, he replies: “You have to meet your commitments, your goals, and there are a lot of ways to that. The last thing we would ever think about is cutting anything that would make the consumer like the brand more (than rival brands).

“I think a lot of companies are looking at their budgets more carefully and that’s not a bad thing. In a recession, many companies come out stronger because they reevaluate what’s really important. Too many companies do too much. Too many priorities, too many activities.” Stengel says that based on his experience, any organisation is working on three to five times as many things as it should.

Jim Stengel

“They’re working on ideas that are too small and on things that are not related to making the consumer’s life better. I have seen success in my career by going to an organisation and saying, Okay, if this is the 200th project, which are the five that would make a big difference? And can we divert resources to those five and make them really great?”

On the new chapter in his professional life, Stengel says he will do some advising at a very senior level.

He also plans to do some teaching because he thinks it’s important to pass on knowledge to youth.

“I’ll be at a university – I can’t say which university right now, but it has a very strong Asian connection,” he says. In addition, Stengel is working on a book called Packaged Good.

“Packaged good”, in Stengel’s context, refers to a new platform for marketing to improve results and make employees and consumers more successful and happy.

During the Global Brand Forum, which incidentally marked his first public speech since leaving P&G, Stengel explained what he meant by “packaged good” brands: “(They) have an inspirational reason for being. These brands aspire to ideals that motivate its employees first, and its customers second.

“These brands have an agenda, a point of view and a commitment to make an impact. These brands operate with integrity and authenticity that is reflective of the brand’s heritage.”

Stengel advocates the 5M’s, which he thinks should replace the traditional 4P’s of marketing. The principles are:

  • Make brand ideals your foundation: To illustrate, he gives the example of Google, whose mission is to organise the world’s information and make it universally accessible, and Nike, which lifts people’s spirits based on the ideal “If you have a body, you’re an athlete”.

  • Master the power of inclusive marketing: Stengel says marketing masters include their employees and customers in bringing their brands’ ideals to life.

    “The power of marketing is inclusive and cumulative, the result of not one or two big things but hundreds of small decisions in a brand’s definition, its substance, its delivery and its behaviour.

    “This inclusion mindset most importantly begins with the workforce that brings this brand to market and with the customers who buy and live with these brands.”

  • Manage people, not objectives: “Put people at the centre of all you do because a brand is simply the collective intent of the people behind it,” Stengel says. According to him, a lot of leaders and managers spend much of their time on planning and changing goals and not as much time inspiring the team that has to deliver the goals. Stengel recalls asking Tesco CEO Terry Leahy what P&G can learn from Tesco.

    “He gave me a very simple and very profound answer: Treat your employees the way you want your customers to treat you. I’ve never forgotten that. I think it’s a lesson that all of us can relearn day after day after day,” says Stengel.

    ·Mission drives margins: Stengel distributed dozens of copies of a book called Firms of endearment: How world class companies profit from passion and purpose to his colleagues at P&G.

    He says: “They (the authors) make a persuasive case that companies that are outperforming their competitors are bringing love, joy, authenticity, empathy and ‘soulfulness’ into the business, and by doing that, they deliver superior financial returns.”

    ·Measure what matters. Stengel advocates measuring return on ideals as opposed to return on investment. “Traditional ROI calculations alone are neither very predictive nor accurate in real time.

    “When we adjust our definition of ROI to ‘return on ideals’, we see a different mindset emerge. Return on ideals is inclusive of all activities, not just those that are bought and paid for.... Built into its very objective is a mission to serve an authentic need.

    “Return of ideals is more strategically sound to business and more compelling to humans in what they value,” he says. Stengel tells of how his team reframed Pampers’ brand ideal from being a diaper brand to becoming a brand that “aspires to help mothers everywhere with their babies’ development.”

    In a global campaign, for every pack of Pampers bought, a donation was made to Unicef to fund a tetanus vaccine for women and children in developing countries.

    Stengel says that in trying to have an ideal behind one’s brand, not everything would turn out right.

    “You have to build in time and resources for some failure; otherwise, you’re not stretching enough,” he says.

    “If you have a culture that is trying to be perfect – trying to get everything right – you’ll never be as innovative as you can be, and this has been proven many different times in many different countries. So failure should be welcomed.”

    • E-mail this story
    • Print this story