SUMMER 2008


Lego is involving their consumers in a way they never have before.
1. HOW LEGO BUILDS RELATIONSHIPS

When it comes to marketing, co-operation and collaboration appear to be the order of the day. Many forward thinking companies are going beyond passive market research, beyond the static focus group, and communicating with consumers in a variety of innovative ways in order to deliver the products that customers really want.

One company that is putting the consumer communication pieces together is Lego, the iconic toy manufacturer, which has embraced the concept of co-creation and user interaction as Lisbeth Valther Pallesen, executive vice president of Lego' Community, Education and Direct division, explains.

Why the renewed interest in consumer engagement?

We are trying to get to the core of understanding what our consumers need. A couple of years ago we had a crisis as a company, and one reason that we think this happened was that we forgot to listen to our consumers. So we have gone back and put the consumer at the very core of what we do, not only understanding them, but also involving them, listening to them and encouraging them to have an impact on the way we work.

What did Lego think about consumers hacking the code of the Mindstorms RCX programmable toys?

We discussed whether we should allow people to do that, and decided that we should, because they are actually improving on our product, and showing their enthusiasm. Some people actually wrote books about how to programme the Mindstorms robots. So in some ways you could say these people kept the product alive, fresh, and relevant.

In 2006, you relaunched the Mindstorms range, turning to your "active users" for help.

A lot of people who developed the first version had left, so we did not have the same amount of expertise internally. But there was a lot of talent among the consumers, so we thought why not involve these people in the product development. We selected a few people who were very engaged and well-known in the community, who had written books, organised events and given presentations about how to use Lego Mindstorms.

How were these people involved?

We had a panel of over a hundred people working on developing the Lego Mindstorms relaunch product, looking at what kind of features we needed, what the software was going to be like, do we use Bluetooth or not, all those kinds of different things.

How do you view Lego's relationship with the consumer now?

We have gone back and put the consumer at very core of what we do, not only understanding them, but also involving them, listening to them and making sure that they have an impact on the way we that work.
We suffer from too many communication options.
2. COMMUNICATIONS UNITE

The latest buzz word in communications, certainly in the business community at least, seems to be "unified communications."

Advanced communications technology means that there are more communication options available to the average executive than ever. Instant messaging, email (probably several different addresses), fax, landline, mobile, voice over internet, videoconferencing, twittering, the list goes on. Whether you are sending or receiving, there is a bewildering array of communication and collaboration tools to use every day at work, and at home.

Now though, there are moves to save us from the complex world of communications world that we inhabit. Instead unified communications are on their way - technology that pulls all the channels together, allowing video, instant messaging, email, video and other comms tools to be accessed, not through each individual application, but instead through a single interface.

Sounds like pie in the sky? Well a survey of 100 IT managers and CIOs in big businesses, by Vanson Bourne for IT services provider Dimension Data, offers some hope for communications swamped executives. According to the survey on average, firms reduced their communication costs by ten per cent using unified communications technology.

There was a ten per cent productivity gain and a 21 per cent improvement in customer satisfaction, and perhaps most interesting for the employees using the technology, six out of ten people said that unified communications was a major factor in promoting collaboration, making the business more efficient, and working more flexible.

And just short of 47 per cent of businesses thought that unified communications would soon become the norm. Which will come as a relief for those people trying to manage several email identities, plus a whole load of other communication applications. Whereas, those people who like to "hide" from the world behind a particular email, instant messaging or other identity, may find there really is no escaping customers, colleagues and the boss, after all.
Western business leaders should spend more time with their Chinese counterparts to learn what makes them tick.
3. WHERE EAST MEETS WEST (OR NOT)

It looks like the managers in the West need to get together with their counterparts in China and really spend some time getting to know what makes them tick, judging by the findings of the Institute of Leadership and Management's recent survey on the characteristics and opinions of managers in the US, UK, France, and China.

Among the various questions posed to the world's managers included a number relating to how they perceived themselves and others, in terms of managerial strengths and weaknesses.

The results were both informative and worrying. According to the Western managers, their Chinese counterparts are hierarchical and authoritarian in style, driving their employees hard to get work done on time and on budget. The Chinese were less good at innovation, paternalism, had little regard for rules and procedures, and even less for ethics and governance.

It was a picture of Chinese managers that accorded with preconceptions of business in China, coloured by the country's communist centralised command-and-control background; a view of China as a country relying mainly on low costs, long hours, and tough management to create economic value.

Unfortunately for managers in the West, if these conceptions of the Chinese at work reflect a wider feeling among executives, then the Western economies have a problem.

The West already failed to heed the management threat from the East once. That was when the Japanese quality movement took major market share from US corporations, particularly in car manufacturing. Significantly, the Japanese quality revolution was partly founded on the work of American academics such as W. Edwards Deming, research which the US and UK chose to ignore for many years.

As it turns out the Chinese have a somewhat different perception of their managerial capabilities, strength and weaknesses than that of Western managers. "Following rules and procedures" is the most typical attribute among Chinese managers, not the least typical. An authoritarian approach to management is, however, not something that China's managers value that highly, placing it towards the bottom of typical attributes, and once again confounding perceptions in the West.

As for innovation, Chinese managers scored innovation above the UK, France or the US, suggesting that competing with China on innovation may be tougher than Western economies and companies imagine.
Andrew Kakabadse, professor of international management development at Cranfield University School of Management.
4. TOP TEAM TOGETHERNESS

Andrew Kakabadse is professor of international management development at Cranfield University School of Management, and one of the world's leading experts on top teams, boardroom effectiveness and governance practice.

In his most recent work Leading the Board: The Six Disciplines of World Class Chairmen, Kakabadse highlights some of the board related findings from his extensive research on the subject, not least how effective communication is fundamental to the success of the dynamic between CEO and Chairman in companies when there is role separation.

The chairman runs the Board and is responsible for governance, for introducing controls into the organisation. The Board has to have an overseeing capacity, so they need the right sort of information - concerns about vulnerabilities must go to the board. The CEO runs the business; does the day-to-day business, drives the team, and thinks up strategy. That is the model in the UK and Ireland.

High-quality relationships between chairman (they run the board and are responsible for governance and controls) and chief executive (they run the day-to-day business, drive the team, think up strategy) happen when there are very practical down-to-earth high quality discussions about how the two make a difference for the business, says Kakabadse.

While there are a number of key factors, for a successful CEO-Chairman relationship the most important is a shared business vision -what is the organisation about, what is it trying to do - and the second is chemistry. Asked to describe chemistry, and the responses were less about warmth, personal relationships, and understanding, and more about analysing things in the same way.

A third important performance factor involves the way board discussions are structured, with the chairman and chief executive agreeing that any proposal put to the board had to be interrogated -- not just challenged but deeply interrogated. Where the interrogation of argument became practice and where the chairman and CEO told their respective teams, the board and management, that they were going to go through this resilient scrutiny, people didn't see it as a personal criticism but as an improvement.
The Four Seasons hotel chain: a classic output of integrated thinking.
5. JOINEDUPTHINKING

Don't listen to people who tell you a problem is black or white, that there is only one solution or another; there is always a middle way. So next time you are writing down a brilliant business idea on the back of an envelope and you are faced with two distinct and opposing business models, remember that it is not a question of either-or, but instead the best solution is often a product of the two.

This is integrative thinking, says Roger Martin, dean of the Joseph L. Rotman School of Management at the University of Toronto, a new type of thinking that defines the best business leaders; it is how successful leaders win.

If you want to know what makes a great leader says Martin, forget the traditional preoccupation with what leaders do, and look at the way leaders think and at the decisions they make. Great leaders have a unique and unusual characteristic - "a predisposition to and capacity to hold in their heads two opposing ideas at once."

A classic example of integrative thinker is Issy Sharp, founder of the Four Seasons hotel chain. When Sharp was starting the company, building his first property, everyone in the industry told him that there were only two business models in the industry that worked.

Number one: the motel business route, small hotels with under 200 rooms, with low amenities but a lot of comfort and warmth. Number two: the large city centre convention hotel business route. Bigger hotels with 750 rooms upwards, all the amenities, but tending to be more cold and impersonal than a smaller hotel.

What did Sharp do? Create a new model - the Four Seasons model. A medium-size hotel between 200 and 350 rooms, with incredible service, that enables them to charge a price premium to fund the amenities, even at a scale that people might think too small to have all the central amenities you need in a hotel.
Flashmobs are now quite common, mainly due to social networking sites.
6. FLASHMOB

A flash mob is, says Wikipedia, "a large group of people who assemble suddenly in a public place, perform an unusual action for a brief time, then quickly disperse."

The first flash mob was, says the Wiki, the creation of Bill Wasik, senior editor of Harper's Magazine, and was held in a retail store in 2003, with the second in Macy's department store. Although, little was known of this until Wasik published an article about the phenomenon in 2006.

What is certain is that flash-mobs are much more commonplace these days, as thousands of people organise, via social networking sites like Facebook, to meet up and have a water fight/pillow fight/mass laugh-in for a specified time-and then disperse. Yes, it may seem pointless-and maybe that's the point -but it hasn't taken the marketers much time to cotton on.

Hence the hip and trendy flash mob inspired Guinness ad - check it out here- www.guardian.co.uk/media/2008/jul/31/advertising?gusrc=rss&feed=media


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