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Dear clients & friends:
In the current economic environment, SKR Partners has heard the leadership teams of numerous organizations singing the same song, which basically goes like this: "We are all accountable. We are all in this together."
Today, every organization is scrutinizing all expense and profit metrics. Incredibly however, we're seeing something vital being lost in the functional execution by most organizations, resulting in statements of "We're not valued" emanating from such crucial areas within companies like Finance, HR, and Marketing.
You would expect companies to rigorously measure the performance of their Marketing spend. However, a January 2009 McKinsey survey* found companies tend to allocate marketing budgets based on historical allocations and rules-of-thumb rather than quantitative measures. Only a small proportion of companies use anything more complex than basic quantitative techniques.
Looking more closely at what organizations are doing -- or not doing -- based on the McKinsey marketing spend survey data shows:
- Nearly 1/3 of organizations rely primarily on qualitative measures
- About 1/4 also use some quantitative measurement
- 23% of respondents base decisions on their previous year's performance (meaning these decisions are not tied to any specific business objectives)
- Only 14% of organizations use a comprehensive set of qualified marketing priorities
Human Resources tends to be another popular functional area for budget cuts. The issue might better be framed by looking to see whether HR leadership is consistently providing services through the following kinds of business-moving metrics:
- Lifecycle employment
- Succession risk management
- Wellness versus healthcare
- A business HR scorecard measuring hard numbers like profit/employee, revenue/employee, and regretted employee turnover
These scores should be benchmarked against goals, prior years' results, and achievements from best-performing industry and marketplace competitors.
Today's recession-battered world requires organizations and their functional leaders to find new ways to make everyone's work have a sense of purpose. The days of motivation through big bonuses and stock options are gone. Success through tough times requires leadership that consistently applies hard-core strategic-driven metrics fused with measured implementation processes. The cliché, "things that are measured, get done" has never been more true and, most importantly, using these types of approaches results in work having a meaningful purpose.
It's not as hard as it sounds!
SKR Partners has many of the tools and strategies you need to lead in difficult times. And, all our solutions are scientifically-based and designed to increase your value through this challenging economic environment.
Contact me today at david@skrpartners.com or 416.789.2700 to learn more.
David Nirenberg
President
SKR Partners
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