Part four of a series based on this question: Is petfood about marketing or nutrition?
Joe Zweiful, chairman of the board of Feed Your Pet Inc. (FYP), has presented a report on structured product development from Justin Case, marketing director, to FYP’s board. There is agreement from the board and certain still-unclear points are further discussed; Joe and Justin sit together again.
Joe: Good to see you. You’ve got the green light from the board to go ahead with your structured product development approach.
Justin: Excellent news. Does this mean that everything was clear to the board?
Joe: Well, not exactly, but the key points hit home.
Justin: That’s what matters; but which points were not clear enough?
Joe: I will give you an example: psychological leadership. What is that supposed to stand for?
Justin: First of all, to the best of my knowledge this is not terminology commonly used. So don’t blame the marketers again. What it means is that the company is seen to be in the vanguard of developments in the industry. It co-defines the developments of the industry. I always say: the psychological leader always surprises positively and its insights are accepted by market and colleagues alike.
Joe: Excellent. But it looks like a hell of a task. This can only be undertaken by one of the big boys, right?
Justin: Quite the contrary, the size of the company is to a great extent irrelevant. It’s about mindset, not size.
Joe: Are you saying that we can become a psychological leader? Should we desire to be that.
Justin: I am convinced that we can. Certainly not overnight, but with a focused effort it must be possible.
Joe: I greatly appreciate your enthusiasm, but how can it be done?
Justin: Let’s start with making our strategy more strategic and less ambiguous. What we now call strategy is more a wish list than a well thought through direction for the company. We need to focus on what matters and be consistent in the execution. That is probably the biggest challenge we are facing.
Joe: It sounds monumental, also given the current composition of the board. You know that internal hurdles are sometimes higher than external ones. However, let’s assume for the moment that it can be done and we have an unambiguous strategy, etc., how would we enter the next phase?
Justin: We then need to make sure that our people who are responsible for the execution of our strategy understand and accept the new approach wholeheartedly. It must be their baby as well. Objectors will not help us to win the war.
Joe: I can see that you already spent some time thinking about all this and I trust that you will do a great job in further thinking about and executing this change. But help me, why should we do it? The majority of the shareholders feel comfortable with the way things go now and rocking boats would clearly take them out of their comfort zone. What is compelling enough to make them change their minds?
Justin: In my view, being a psychological leader adds to the sustainability of our company. We would have very strong defenses in case the going gets tougher, which is very likely to happen. Our earnings potential will be way above the industry average because we set the scene. And this leads to a higher than average valuation of the company in case the shareholders wish to sell. Is this compelling enough?
Joe: I will convince the board that this is the way to go. Can you work out the plan in the meantime, starting with strategy revision?
Justin: I will not only prepare the plan, but also send you my input for the revised strategy. It wouldn’t make sense to indicate the flaws in the current strategy without giving you my thoughts for improvement. And beware, psychological leadership is more than just product.
To be continued …
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