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30 November 2013

Loyalty Beyond Reason

Tag(s): People, Marketing
This year’s annual city lecture of the Worshipful Company of Marketors was delivered by Kevin Roberts, the New York-based CEO Worldwide of Saatchi & Saatchi – one of the world’s leading creative organizations with over 6000 people and 130 offices in 70 countries – and part of Publicis Omnicom Group, the world’s largest communications group. Saatchi & Saatchi works with 6 of the top 10, and over half of the top 50, global advertisers.

Born and educated in Lancaster, Kevin Roberts started his career in the late 1960s with the fashion house, Mary Quant. He became a senior marketing executive for Gillette and Procter & Gamble in Europe and the Middle East. At 32, he became CEO of Pepsi-Cola Middle East; and later Pepsi’s CEO in Canada. In 1989, Roberts moved with his family to Auckland, New Zealand, to become Chief Operating Officer with Lion Nathan. He took up his position as CEO Worldwide with Saatchi & Saatchi in 1997.

Kevin Roberts has honorary appointments and doctorates at several universities. Presently he is Honorary Professor of Innovation and Creativity at the University of Auckland Business School and Honorary Professor of Creative Leadership at Lancaster University. With academic colleagues, he wrote Peak Performance: Business Lessons from the World's Top Sporting Organizations, an inspiration-driven business theory and practice. In 2004, he wrote Lovemarks: the Future Beyond Brands, a ground-breaking business book published in 18 languages, showing how emotion can inspire businesses and brands to deliver sustainable value. He has written further books on the power of emotion and the screen age. Lovemarks was named one of the ten Ideas of the Decade by Advertising Age in 2009.

Kevin gave his lecture last week in the unusual setting of the beautiful Wren-designed church of St Mary-at-Hill. He chose as his theme ‘Loyalty Beyond Reason’ by which he essentially means that brand loyalty by today’s consumers is based on their emotional responses to a brand rather than their rational responses. Kevin likes to be provocative and last year at The IoD’s Annual Convention came out with the view that marketing and strategy are dead. I expected more of the same and we got it. He said:

 “We don’t just live in a VUCA world - a volatile, uncertain, complex and ambiguous world - we live in a SUPER VUCA world, that is Vibrant, Unreal, Crazy and Astounding.   We live in a vibrant world where our kids are connecting to each other and to brands across the world with no money involved. To us this is a world that’s gone crazy.

“Strategy is dead. Who really knows that is going to happen anymore in this super VUCA world? The more time and money you spend devising strategies the more time you are giving your rivals to start eating your lunch.

“Management is dead. To win today you need a culture and an environment where the unreasonable power of creativity thrives. Ideas are today’s currency not strategy. Martin Luther King did not say ‘I have a vision statement’ did he? He had a dream. You have to make sure you have dreams and your brand also needs a dream.”

He went on to outline how successful business leaders need to harness creative things in the future, saying: “Business leaders need to become creative leaders. We need to change the language of business. Who wants to be a Chief Executive Officer? It sounds like you work for the government and who would want that? Being a Chief Excitement Officer would be better, don’t you think? The role of a good CEO is to get people to buy into their dreams and their company’s dreams. The CMO should be the Chief Magic Officer and the CIO the Chief Ideas Officer.  

 “The big idea is dead. There are no more big ideas. Creative leaders should go for getting lots and lots of small ideas out there. Stop beating yourself up searching for the one big idea. Get lots of ideas out there and then let the people you interact with feed those ideas and they will make it big.”

“Leaders need to become emotional thinkers. The difference between rational thinking and emotional thinking is that rational thinking leads to conclusions and meetings and more meetings. Emotional thinking leads to action.

“There are three secrets to emotional thinking – mystery, sensitivity and intimacy. It is a lot about story telling. Brands need to tell stories on their websites, on their packaging and so on. Make sure your brand and company has a smell, it has a sound, it has a feel and an intimacy with people. Think about how you can build empathy. It is the small things that count and how consumers feel about our brands that count today.

“Marketing is dead. The role of marketing has changed now. There is nothing new anymore. If marketers are just hearing about something going on then it is already old in today’s world. The further up in a company you go the stupider you become and the further away from new things. Speed and velocity is everything today. Marketing’s jobs is to create movement and inspire people to join you.

“Everyone wants a conversation. They want inspiration. Inspire people with your website. Don’t just interrupt, but interact. Asking about Return on Investment is the wrong question today. You should be asking about Return on Involvement.”

Kevin believes that the consumer owns the brand, not the company. People don’t want information any more, there’s already too much information. Instead their decision-making is emotional and so advertising and other communications must reach out to the emotional responses of consumers. He illustrated this with some of Saatchi & Saatchi’s best advertising from around the world. Kevin is a terrific speaker but it helps that he travels the world with his own audio-visual team and can pick the very best from a global show reel to emphasise his points. However, it was striking that most of these were American using humour and irony to make their points.
 
While Kevin is very persuasive and holds a position of great authority from which he can make his arguments I was not convinced. I can see that much is changing through social media, mobile connection to the internet and other trends. But I also think that some fundamentals don’t change. Decision – making is usually a combination of both emotional and rational. I don’t agree that people don’t want information. Much of their connection to the internet is precisely to search for information. While some will rely on word of mouth via Facebook others will seek out the website that tells them what they want to know. One example would be the host of price comparison websites that have sprung up. Most of these are gamed but the consumer uses them to find what they believe is the best deal. Not much emotion in that.
 
Where I thought Kevin was on firmer ground was in his views on management. Whereas management traditionally spent most of their time assessing alternative strategies and in slow decision making processes now the best of them decide quickly and concentrate on execution which he says used to take 20% of their time and now takes 70%. I don’t know what science lies behind these numbers but I agree with the overall point.
 
I was particularly impressed with the bravery of two of Kevin’s examples. In Australia the agency produced two commercials for the ‘Don’t Drink and Drive Campaign’ that were breath-taking. A convicted multiple murderer spoke to the camera that effectively there was no difference between what he had done and what someone drunk behind the wheel did in killing someone in a car crash. And in South Africa where there is an enormous problem with disadvantaged black youths in the townships taking up a life of crime for the lack of alternatives, a young black boy spoke to the camera that he would face a life of crime unless more was done to provide education. The charity behind this commercial was raising funds for such a programme of education. But the South African authorities summoned Kevin to South Africa and then instructed him to pull the ad or they would close down Saatchi & Saatchi in South Africa. Kevin’s response was to run a second ad.
 
Copyright David C Pearson 2013 All rights reserved



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