What Does The Value Of A £963K Bonus Look Like?

The controversy over Royal Bank Of Scotland Chief’s £963K bonus hit the headlines this week.

As you might have seen there has been a range of reactions broadly along a spectrum from ‘he deserves it’ (the bank, and UK Financial Investments) to ‘he doesn’t deserve it’ (politicians and outraged members of the public).  Clearly the debate hinges on what people consider to the value of Stephen Hester’s contribution to the business.

People can get very ‘green eyed’ over the rewards other people achieve, and in my commercial past I enjoyed business performance bonuses. So as a general principal I don’t have a problem with people who make a positive difference to an organisation and who face risks and responsibilities getting additional rewards.

Stephen Hester’s bonus get’s me wondering though. Wondering especially about what innovative and insightful difference he has made to RBS. The sort of difference that would leave ordinary people like you and I slapping our foreheads and saying ‘you know, I wish I’d thought of that!’

From the outside it seems he is clearly a ‘safe pair of hands’ and this reputation has obviously been well earned. My question is this…is does being just a safe pair of hands enough to justify a massive bonus?

Tell me if I’m wrong, but being fortunate to have the senior job post and then overseeing some rather obvious tasks that most final year undergraduate business students would identify as necessary in the context of RBS hardly seems worth £963k. A bonus yes, but £963k for re-balancing a business that needed re-balancing, and the obvious move of cutting costs? Where are the bright ideas? the new value propositions? the game changing ways of working?

There is the argument that the bonus is relative in the context of the vast sums of the banking world and the competition for talent in a global market place.

Stephen Hester a Lionel Messi? I can’t really say. Mind you if the remit was ‘to get it sorted’ and he has done that then he probably deserves the bonus because there was always the possibility he might not have! It’s just that it seems for alot of people there was a very low probability of Stephen screwing anything up because it was so bad in the first place.

We are told “the bonus reflected Mr Hester’s work towards rebuilding RBS”. What do you think?

Realistic Business Engagement Advice For Business Schools

 

There is a fine line to be trod between customer orientation and customer worship. This presents a real challenge for a business school.

Surely a key aspect of a university business school’s value proposition is not just a claim to research independence but also an independent advisory voice that can express things without fear or favour.

Once again my author of the week Michel de Montaigne offers insight. In his essay on the role of ambassadors (chapter xvi) he also summarises the key purposes in society for clerics, soldiers, merchants, and courtiers.

Courtiers have special responsibility for ceremonies and manners. They are close to the Patron and this seems to be a very fortunate position. I don’t think it is too much of stretch to see a business school in the role of courtier. However in chapter xv de Montaigne points out the problem of being a courtier…

“A man that is purely a courtier, can neither have power nor will to speak or think otherwise than favourably and well of a master, who, amongst so many millions of other subjects, has picked out him with his own hand to nourish and advance; this favour…”

Is it feasible to avoid the ‘courtier trap’ as business school I wonder?

Realistic Brand Management Advice

I’m still reading Michel de Montaigne and if he was good enough for Shakespeare he’s good enough for me.

This time the following quote in an essay that discusses how we should be educated got me thinking about Branding:

“Such as have lean and spare bodies stuff themselves out with clothes; so they who are defective in matter endevour to make amends with words“

One of the key principles of marketing is distinguishing between what something ‘is’ and what is ‘does’, in other words the benefit rather than the feature, a concern with the solution to the problem. I certainly go along with that.

A classic example of this way of thinking was the radio interview with the executive from Louis Vuitton who was asked how long he had been in the hand bag business.  Dismayed he retorted, “the handbag business? we’re not in the handbag business…we’re in the business of selling dreams!”

Now I’m all for the idea of conveying an idea, and sure Brands make use of associative thinking to give meaning. I’m a Realist too (see Andrew Sayer for more details) and that’s why Michel de Montaigne’s observation captured my attention.

If Branding experts think that their role is changing reality by merely changing meaning through words then the organisations they work for are in deep trouble. As Andrew Collier (Critical Realist) said, we might as well solve the unemployment problem by re-describing people as employed!.

My suggestion would be that Branding experts should concentrate on expressing the true Value Proposition (See Ballantyne, Vargo & Lush et al)  of the product or service, and yes that might be something intangible as ‘happiness’, but mucking about by being manipulatively smart with meaning insults the customer and totally misses the point of the purpose of a Brand.

The Brand should reflect what the product actually does for the customer not be an exercise where organisation executives “stuff themselves out with clothes”. If products and services do not satisfy the needs of customers and deliver the real benefits they seek then Brand Managers should be tackling that issue rather than pretending that something is what it is not through the invention of spurious meanings.

 

Relationship & Service Marketing Advice From The 16th Century

Way back in the 1500s Michel de Montaigne wrote a series of fascinating essays on life, the universe, and everything.

This passage caught my eye:

“I have been present when, whilst they at the upper end of the chamber have been only commenting the beauty of the arras, or the flavour of the wine, many things that have been very finely said at the lower end of the table have been lost and thrown away. Let him examine every man’s talent; a peasant, a bricklayer, a passenger: one may learn something from every one of these in their several capacities, and something will be picked out of their discourse whereof some use may be made at one time or another”

I reckon this is sage advice for any of us who consider ourselves to be marketing ‘experts’, and a reminder of the value and importance of the insights co-workers can have no matter where they work in the organisation.

Hubris is a danger faced by anyone who finds themselves in a position of authority and power.

Christmas Sentiment

Christmas is a time full of signs and symbolism. The same goes for any profession and Marketing management is no exception.

Marketing buzzwords are a sign. A sign with many meanings. They can signify ‘I’m in the know’, they can signify ‘the deliberate exclusion of the unknowing’, they can signify ‘the fudging of plain English’.

I picked up this example in a business article from The Independent about Thornton’s the chocolate retailer. Referring to recent poor sales the company said one cause was “continued weakness in customer sentiment”. What on earth is the meaning of that! The sentiment refers to something so ‘that something’ must be poor not the actual sentiment.

Interestingly for me it also seems to imply that the ‘sentiment’ is something that is being done ‘to’ the business. Something outside of their control. Poor sentiment is portrayed in the same way as poor weather. Its come our way and we’ll be through it soon. This is a dangerous mind set that focuses attention on PR and wordsmithery rather than the real issues that must be facing the business.

Sentiment is marketing communications latest buzzword. It is next in line to become reified by marketing acolytes.

Sure sentiment matters and tools like Radian6 are helpful and powerful, and it also risks becoming a fudge. A gloss over what matters, an arcane marketing short hand that skates over commercial issues that need to be communicated plainly.

I can hear it now ‘we have a sentiment crisis’, ’101 ways to make your brand sentimental’, ‘sentiment sentience – how knowing what your customers feel about your products matters.’

All of sudden marketing has a brand new issue, something marketers can get concerned with, and something that diverts thought and energy from the fundamental issues. So in the grand tradition of Semiology perhaps being clear on the distinction between the sign and what it represents is a vital marketing capability. In this way we can ensure that Marketing is not dismissed as a fudge-box.

Camera Brands To Die For-A Photo Shoot With A Difference

Think again when someone says they would like to take a shot of you with their new camera this Christmas.

In the quest to grab our attention and make sure that brands stand out from the crowd creative people certainly come up with some amazing ideas. I reckon that has to be the case in the following YouTube.

For me its either one of those full of deep meaning metaphorical stretches that supposedly wheedles away at your sub conscious and modifies your buying behaviour or it is simply so self-referential as to be meaningless for most of us. What do you think?

Would you die for a digital SLR brand?

Thanks to Adrian Wood Photography for sharing this.

When One Store Closes Another Store Opens

So students at Sheffield Business School have lost the Blackwell store at the city campus. I wonder if that indicates a change in student behaviour. There is certainly an increase in the number of students with iPads and Kindles so maybe digital books are really having a high street impact after all.

Its an ill wind the blows nobody any good. When one store closes another store opens as they say! There are other ways to get hold of a ‘real’ book. This is especially good news for those of us that like the touchy feely approach to reading and the joy of owning a dog eared much thumbed and highlight covered text. Now students can get the books on selling they need just like like this…

Business to Business Consultative Selling Skills Recommended Books

Do You Think Outside The Box?

Think Outside The Box by reasonablerobinson
custom embroidered caps by zazzle

If you have ever played buzzword bingo then I’m sure you will be very familiar with the now cliched term ‘think outside the box’.

Like lots of management ideas the phrase points to an important insight about the way we can all become locked into routine patterns of thinking.  Gareth Morgan calls these our psychic prisons, Social Theorist Anthony Giddens  alerts us to operating within the limits of our knowledgabilty, and Chris Argyis  describes the distinction between single loop and double loop problem solving, in which the solutions to our problems frequently lie outside of the system where they occur.

Thinking, whether inside or outside the box is often belittled by practicing managers. Often they will say they can be doing something more useful than thinking. I find that rather strange because every action is based on an idea (however implicit)

Developing your thinking is the primary purpose of all higher education business studies programmes. This is not always made explicit. Often Business School prospectii simply mention what courses are (their features) rather than explain what the courses do for the student (their benefits)

Many people have no idea that purpose of business studies degrees has been carefully thought through by The Quality Assurance Agency for Higher Education (who? I here you say) and The Association of Business Schools.

By studying for a business degree you are embarking on course of personal development that will guide you in four key areas:

i – reflective mindset – recognise assumptions and learn from experience

ii – change master – recognise and manage ambiguity, competing demands, and facilitate change

iii – effective manager – recognise and choose best courses of action amongst alternatives

iv- analytical thinker – deeply understand the nature of business phenomena

Combined,  these four areas together with the experience of study itself will help anyone develop a capability for thinking outside the box. So whatever business degree you choose whether that’s a bachelor’s degree, a specialist MA or Msc or a generalist MBA thinking outside the box comes as standard.

Excellence In Practice Commendation Shows Co-Creation In Action

I was chuffed to bits to be part of the Sheffield Business School and Sheffield University course design and development team that have been commended by the internationally acclaimed European Foundation for Management Development following the roll out of an innovative leadership development programme to 65 participants in the Sheffield City Region Leaders Programme.

The aim was to develop a unique  leadership development programme emphasizing imaginative ways to co-create cross enterprise service design that delivered cost effective,  high value services to buyers and users. Participants have come from both public and private sectors and this combination is a key element of the programme going forward. In terms of empirical evidence of the principals inherent in Vargo and Lusch’s Service Dominant Logic the Sheffield City Leaders Programme is a clear example of value in use.

Lee Adams Steering Group Chair and Deputy Chief Executive of Sheffield City Council commented in The Local Government Chronicle. (subscription required) “The participants work together on practical projects. Examples include inter agency knowledge sharing on vulnerable people; delivering the city cohesion strategy more effectively; improving occupancy ratios in social housing; and consistency of provision in psychological therapies”.

The EFMD award placed the Sheffield team in the company of Microsoft, Apple, and ING and whilst we were not shortlisted amongst the five winners, we have been recognised as a “Highly Commended Case” and this is very prestigious.

The programme is accredited as a Professional Business Qualification that is designed for practicing managers who wish to underpin their experience with Masters degree academic qualification by the end of the full programme.

Johnston’s Law Of Business Management

 

Omnipotence ≠ Omniscience or Omnipresence