Implementation processes and internal marketing: Making it happen

Lecture 11

A route-map for market-led strategic change

Value-basedmarketingstrategy

New marketing

meetsold

marketing

Strategicthinking and

thinkingstrategically

Customer valuestrategy andpositioning

The strategic pathway

Strategicmarket choices

and targets

Market sensingand learning

strategy

Strategicrelationshipsand networks

Change strategy

Strategicgaps

Organizationand processes

for change

Implementationprocess and

internalmarketing

Part ICustomer value

imperatives

Part IIDeveloping a value-based

marketing strategy

Part IIIProcesses for managingstrategic transformation

The Customeris always

right-handed

Agenda - 1

• Why do we need to make an issue out of strategy implementation?

• Implementation versus strategy• So, what is the thing about implementation?• Implementation denial• So, why doesn’t it work?• Building implementation strategies

Agenda - 2

• Strategic internal marketing• Where does that leave us with strategy implementation?

Why do we need to make an issue out of strategy implementation?

• Many company change initiatives fail• Implementation capabilities• The need for internal marketing

– getting employees on our side– getting managers on our side– getting collaborators on our side– changing culture

How groups can block effective change in a company

Energy

Understanding

HighLow

The“yes … but”sor maliciousobedience

Theideal

Thedangerousenthusiasts

ThedinosaursLow

High

Implementation versus strategy

• Traditional approaches: organization, resources action lists, control systems

• Creates a dichotomy between strategy formulation and implementation

• Need better ways of integrating strategy and implementation

So, what is the thing about implementation?

• Implementation failures associated with– separation of planning from management– hopeless optimism– implementation recognized too late– denial of implementation problems– implementation bolted-on at the end– fixation– implementation is a black-box

Implementation denial

• Failure to recognize the implementation problem• Need to recognize problems and prepare for change

Recognising the implementation problem and preparing for change

Perception that there is a problem

Willingnessto change

High Low

High

Low

Readyto go

Blissfulignorance

Worried stayers/frightened

rabbits

Closedminds

So, why doesn’t it work?

• Strategy versus implementation skills– diagnosing implementation problems means

comparing strategy (appropriate or inappropriate) with execution skills good or bad)

Diagnosing the implementation problem

Strategy

Executionskills

Appropriate Inappropriate

Success Roulette

FailureTrouble

Good

Bad

So, why doesn’t it work?

• Organizational stretch– what is the relationship between the fit of the strategy

with company capabilities, systems and structures and the strategy itself (new or old)?

Matching strategy to company capabilities

Fit of strategy with companycapabilities, systems, structures

Marketstrategy

Good Poor

Synergisticstrategies

Stretchstrategies

Obsoletestrategi

es

Conventionalstrategies

New

Old

So, why doesn’t it work?

• Testing out the strategy versus blaming the salesperson• Lip-service to strategy caused by

– management by assumption– structural contradictions– empty promises marketing– bunny marketing

• Counter-implementation emerges

Testing market strategies

Test the strategy

Results Reason

Is this really a coherentand complete strategy?

Is this strategy capable ofbeing implemented by thiscompany at this time?

Have we communicated thestrategy - adapted it, wonsupport for it?

Noimplementation

This strategy doesnot tell us what to do

Noimplementation

Lip-service - we mayagree with the strategybut we cannot put it into effect

Noimplementation

We do not accept thisstrategy - let’s see whatcounter-implementationcan do!

Implementation(maybe)

Yes

Yes

Yes

No

No

No

So, why doesn’t it work?

• What about execution skills and competences?– interacting skills– allocating skills– monitoring skills– organizing skills

Building implementation strategies

• Screen strategies for implementation problems• Isolate and evaluate priority implementation problems• Evaluate key players in implementation• Develop implementation strategies

Screening strategies for implementation problems

1. Screen strategies for implementation problems early

2. Isolate and evaluate implementation problems in detail

3. Identify and evaluate key players

4. Develop credible, costed implementation strategies- or reject the strategy

Internal and external marketing

Strategy

Plan

Externalmarketing

programmeProduct

PriceCommunications

Distribution

Internalmarketing

programmeProduct

PriceCommunications

Distribution

Targeted at keygroups in thecompany, alliancepartner companies,and other influencers

Targeted at keycustomers, segmentsand niches, and otherexternal influencers

Role of Internal Marketing

• The managerial actions necessary to make all members of the organization understand & accept their role in implementation– internal products-marketing strategies– internal prices-changes that must be undertaken to

implement the marketing strategy– internal distribution-how the strategies are communicated

internally (training)– internal promotion-persuasive communications

Models of internal marketing Source: Ahmed and Rafiq (2002) Internal Marketing Butterworth Heinemann Chapter 2

Berry’s model of internal marketing

Employeeinvolvement

andparticipation

Treatingemployees

ascustomers

Jobs asproducts

Employeesatisfaction

Application of marketingtechniquesinternally

Attraction andretention of customer consciousemployees

Attitudestowardsservice

mindedness

Perceivedservicequality

Customersatisfaction

Competitiveadvantage

Gronroos’ model of internal marketing

Supportive management

Pre-launchinformationregardingmarketingcampaign

Supportiverecruitmentpractices

Training

Participatemanagement

Employeediscretion

Employeesrealise theimportanceof their role

Motivatedcustomerconsciousemployees

Employees’satisfaction

Goalinteraction

Perceivedservicequality

Customersatisfaction

Increaseprofitability

Interactivemarketing

Increasedsales

Rafiq and Ahmed meta-model

of internal marketing

Servicequality

strategy

Supportivesenior

management

Pre-launch informationregarding marketing

campaigns

Applicationof marketingtechniquesinternally

Supportiverecruitmentpractices

TrainingParticipativemanagement

Employeediscretion

Jobs asproducts

Employees realise theimportance of

their role

Motivatedemployees

Customerconscious/customerorientatedemployees

Goodinteraction

Perceivedservicequality

Customersatisfaction

Increasedprofitability

Salesminded

employees

Employees’satisfaction

Attraction and retentionof customer conscious

employees

Increased salesdue to interactive

marketing

Word of mouthpromotion

Increasedloyalty

A framework for internal marketing of services

Inter-functionalCo-ordination

and Integration

Marketing-likeapproach

Employeemotivation

Customerorientation

Jobsatisfaction

Servicequality

Customer satisfaction

Empowerment

The tools of internal marketingSource: Ahmed and Rafig

Caveats

• Employees as customers– products may be unwanted (e.g. new methods of

working)– employees must accept the ‘product’ or be forced into

acceptance under the threat of disciplinary action or dismissal

Caveats

– problem with idea of customer sovereignty– make impossible demands on organisation and its

resources

• In this approach employees do not know that they are customers even though they are treated as such

INTERNAL MARKETING MIX• Number of elements under the control of management are combined and

integrated in order to produce the required response from the target market.

• Use extended seven P’s of service marketing

• Explicitly recognises inter-functional interdependence and the need for an integrated effort for effective service (or product) delivery

• Major aim of an internal marketing programme

Levels of internal marketing

Organizationallevels

Criticalquestions

Internalmarketinglevels

ProcessualSurface Structural

What are the plans,systems and procedures inthis business?

Product: Plans and strategiesPrice: Opportunities given upCommunications: Information, market researchDistribution: Reports, presentations

Who runs thingshere?

Product: New strategic directionPrice: Loss of control, status, initiativeCommunications: Sponsorship,agenda-settingDistribution: Policies, participation

Who has influencehere - sets the agenda,owns key processes,is an “expert”?

Product: individual’s job, status, rolePrice: Adjustment tochange, new cultureCommunications:Persuasion, image,influence, choice of criteriaDistribution: informal communicationsnetwork,social interaction

Strategic internal marketing

Programme

Product

Price

Communications

Distribution

Contents

The strategy and the plan,including the values, attitudesand behaviours needed tomake them workWhat we are asking internalcustomers to “pay” – otherprojects abandoned, personaland psychological adjustmentto changeMedia and messages to informand persuade

Physical and social venues fordelivering the product and communications

Examples

For example, the written plan,the new company initiative

For example, stepping out ofcomfort zones for new typesof operations

For example, reports, plans,presentations, videos,roadshows

For example, meetings, work-groups,training sessions and workshops,informal meetings, social occasions

INTERNAL MARKETING MIXPRODUCT

• Strategic level refers to marketing strategies

– sell values and attitudes needed to make a plan• Tactical level, e.g.

– new performance measures– new ways of handling customers

• Refer to services and training courses provided by HRM

INTERNAL MARKETING MIX• Fundamental level

– job– managers need to concentrate on the benefits of the product rather than its

features– employees perspective and benefits they seek– consider:

• training needs, • level of responsibility and involvement in decision making,• career development opportunities, • working environment

– facilitate hiring retention and motivation of employees

INTERNAL MARKETING MIXPRICE

• Psychological costs of adopting new methods of working

– projects have to be forgone in order to carry out new policies (i.e. opportunity cost) or to transfer pricing and expense allocation between departments

– opportunity costs difficult to measure precisely

– employees tend to overestimate costs of undertaking new practices and are inclined to resist change

• Benefits of adopting new policies need to be clearly explained and any fears allayed by providing employees with appropriate information

INTERNAL MARKETING MIXInternal communication/Promotion

• Need co-ordinated use of various techniques• personal selling

– face-to-face presentations to individuals and groups more effective than in external marketing

– presenter has implicit authority behind what they are saying

– face-to-face communication regarded has having far greater impact than other communication methods.

INTERNAL MARKETING MIX• Incentives

– cash bonuses

– awards

– recognition programmes

– prize draws

– competitions• used to overcome short-term resistance or to motivate employees toward consistent

behaviour or to increase productivity.

INTERNAL MARKETING MIXAdvertising

• Companies need to take care of image projecting of themselves and the workforce in external advertising

– seen be employees as well as customers

– positive when positive customer-orientated attributes portrayed which employees can attempt to emulate

• Narrow casting developments

– Business TV

– Webcasting

INTERNAL MARKETING MIXPlace/distribution

• Place and channels (or third parties) that are used to get to customers

• place is the locations where policies are announced :

– meetings

– conferences

• channels refers to third parties used to deliver training programmes

– consultants and training agencies

INTERNAL MARKETING MIXPhysical/tangible evidence

• Environment in which a product is delivered and where interaction takes place between contact staff and customers, as well as any tangible goods that facilitate delivery or communication if the product

• Physical evidence

– essential or peripheral (tangible cues that a product has been delivered)

• Peripheral evidence e.g. memos, guidelines, training manuals

• Essential evidence - environment in which the product is delivered

• Special significance of particular policies may be signalled by holding conferences or by sending employees for special training to external agencies such as universities

INTERNAL MARKETING MIX• Tangible cues important

• Documentation of policies and changes in policies important

– if employees are required to perform to certain standards then it is important that these standards are fully documented

• Training sessions

– tangible manifestation of commitment to standards or particular policies

INTERNAL MARKETING MIXPROCESS

• How customer receives a product

• customer consciousness may be inculcated into employees by training (or retraining) staff

• Can refer to whether new policies are introduced through negotiations with unions or imposed unilaterally

• Also refers to delivery method e.g.

– circulars, videos or line managers are sued to convey messages

INTERNAL MARKETING MIXPARTICIPANTS

• People involved in delivering product and those receiving the product who may influence the customers perceptions

• Source of internal marketing programme plays a crucial role in their effectiveness• Inter-departmental or inter-functional communications are likely to be least effective• Most effective means through immediate superior who needs to be motivated by

strategic management.• Direct contact between strategic management and contact staff would not by itself be

sufficient for the implementation of internal marketing programmes.

INTERNAL MARKETING MIX• Market segmentation

– process of grouping employees with similar characteristics and needs and wants– include types of benefits that employees want, and roles and functions that they

perform– need to be segmented along motivational lines rather than departmental or other

lines traditionally used in HRM• Market research

– identifying needs and wants of employees– monitoring the impact of HRM policies on employees– long history in HRM in form of employee attitude surveys.

Implementing Marketing Activities• Good communication is key

– upward communication from the front line– allows management to understand problems & needs of

the employees• Employees must understand the implementation timetable

– specific activities to be performed, time required, sequence, & who is responsible

Implementing an Internal Marketing Approach

• Conscientious recruitment, selection & training of employees

• Top managers must be completely committed to the marketing strategy & overall plan

• Employee compensation must be linked to marketing strategy implementation

• Open communication must exist at all levels• Organizational structure, processes & policies must match

the marketing strategy

Strategic internal marketing

• Operational internal marketing– service marketing and quality– brand ambassadors– internal communications– innovation management– corporate positioning– Internal markets instead of external markets

Strategic internal marketing

• Strategic internal marketing– internal market orientation– internal marketing strategy– the structure of SIM

Strategic internal marketing

• The internal marketing programme– internal market measurement– internal marketing targets– internal marketing evaluation

• The hidden face of strategic internal marketing

Causes of Improper Implementation

• Marketing strategy is inappropriate or unrealistic• Implementation was inappropriate for the strategy or

was simply mismanaged• Internal &/or external environment changed

significantly between the development of the marketing strategy & its implementation

Where does that leave us with strategy implementation?

• Execution skills versus process management in strategy implementation– weak implementation– management-driven implementation– implementation-driven strategy– integrated strategy and implementation

Execution skills versus process management in marketing strategy implementation

Process management

Executionskills

LowHigh

Integratedstrategy and

implementation

Management-driven

implementation

Weakimplementatio

n

Implementation-driven

strategyWeak

Strong

A route-map for market-led strategic change

Value-basedmarketingstrategy

New marketing

meetsold

marketing

Strategicthinking and

thinkingstrategically

Customer valuestrategy andpositioning

The strategic pathway

Strategicmarket choices

and targets

Market sensingand learning

strategy

Strategicrelationshipsand networks

Change strategy

Strategicgaps

Organizationand processes

for change

Implementationprocess and

internalmarketing

Part ICustomer value

imperatives

Part IIDeveloping a value-based

marketing strategy

Part IIIProcesses for managingstrategic transformation

The Customeris always

right-handed