I was reviewing a relative old book (it is now over 20 years old) the other day: Warren Bennis’ On Becoming a Leader. In his book, Bennis suggests that the next generation of leaders will have certain things in common:
On re-reading this list, I was struck by number 6:
Devotion to long-term growth not short-term profit
Over the last twenty years, I am not sure that we have seen much evidence of this with many company leaders still very focused on short-term profit and customer acquisition, particularly in publicly traded companies.
However, over the last couple of years especially in the face of the economic turmoil we have faced, the changing face of marketing from broadcast to permission/conversation based, the rise in competition and the impact of social media, I believe that companies are being forced to change the way they do business. Or, at least, start to think about changing the way they do business to one of longer term growth as the means of delivering short-term profits are being increasingly undermined.
When Bennis first wrote his book, marketing used to be a lot easier. Companies found out where their customers lived, worked with an agency or an in-house team to create an eye-catching campaign and then bought lots of mass media space to push their message – broadcast – sales were generated and targets were met. But now, the rules have completely changed.
I’m not saying that the traditional forms of advertising are not still very powerful. They are undoubtedly are. But, they are becoming less and less effective whilst the internet is becoming more and more significant in our lives and is changing the nature of how we interact with each other and companies.
The rise in Social media is a generating a never-ending stream of interesting and innovative ways that businesses can reach and engage their customers. However, whilst the possibilities may be endless, the returns are not guaranteed and there is no new proven path. So, experiments and risk-taking will need to be encouraged if companies are to be able to define and tailor what works for them and their customers in this new world. Further, more change seems inevitable.
Given the changing landscape and falling returns from traditional marketing, it seems to me that this all undermines a short-term focus and is demanding a shift to more longer term thinking focusing on customer retention and customer loyalty. I think leaders at all levels of companies are starting to realise this.
Am I right? Or, am I hoping I am right?
Let me know what you think.
Thanks to straymuse for the image