Larry Light is the Chief Executive Officer of Arcature LLC, consultants in brand management. Light was a senior executive and Board member at BBDO and President of the international division of Ted Bates. He was Global CMO of McDonald’s from 2002 to 2005. More recently, Light was the interim Global Chief Brands Officer of IHG. Light’s views on marketing issues are regularly quoted in the media, including The Wall Street Journal, The New York Times, the Financial Times, CNBC, Advertising Age, Bloomberg BusinessWeek, Forbes, and Fortune. He has authored marketing articles in Advertising Age and The Journal of Brand Strategy.
He and Joan Kiddon are the co-authors of New Brand Leadership: Managing at the Intersection of Globalization, Localization and Personalization, published by Pearson FT Press (June 2015).
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Morris: Who has had greatest impact on your professional development? How so?
Light: Arthur Cullman, marketing professor at Ohio State University. He convinced me to try the Advertising Agency world. I interviewed at agencies in Chicago and New York City. I decided to go BBDO, an advertising agency in NYC. I knew nothing about the advertising business. They hired me for the summer and then I returned to school. BBDO funded the completion of my PhD dissertation. I joined BBDO full-time to start a marketing science function and was later promoted to client service in the Market Research department. That led to becoming the head of the market research department. I then became EVP responsible for marketing and media and new business. I joined the Board of Directors. If it were not for Art Cullman, who knows what path my career would have taken?
Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow?
Light: The turning point was definitely joining BBDO. I learned to love life in the marketing world. I am still active in the marketing space as a consultant on brand management. I still love it.
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Light: My undergraduate degree was in behavioral psychology. This is certainly a useful education relevant to understanding customer behavior. This was followed by a graduate degree in human factors. This led to an emphasis on quantitative methods helping to understand and predict human behavior. This background is even more relevant today as marketing analytics increase in importance every day.
Morris: Here are several of my favorite quotations to which I ask you to respond. From Michael Porter: “The essence of strategy is choosing what not to do.”
Light: Nothing in business is either/or. My coauthor Joan Kiddon and I are very clear in our books that strategies not only provide a plan for what to do but also what not to do. Of course, you must stop doing what is not worth doing. This is clearly a difficult path for many in leadership to follow. You see it all the time. Leaders have no trouble adding to the list of “must-do now” but find it very difficult to have a list of “stop-doing now.”
Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”
Light: There is a statistical approach called the Kano model that basically says those things that are new today will be the generics of tomorrow, the must-haves of the category, the opening stakes to play in the category. Some dangerous ideas are just that, dangerous. The key is relevance. If it is a relevant idea, it will move from being differentiating to generic, like free Wi-Fi in hotels, which moved from “we are unique” to “we have it have it too.”
Morris: From Thomas Edison: “Vision without execution is hallucination.”
Light: Thomas Edison had a way with words. Execution is everything. Vision without execution is intellectual entertainment. Customers only know what they experience. This is business reality. Vision without action is illusionary. Business is all about executional excellence to produce enduring profitable growth. You cannot just think your way to success.
Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Light: There are always leaders and managers who believe that being busy is synonymous with making progress. In business and brand, it is all about doing the right things in the right way with the right people for the right goals. If a car salesperson is rewarded for sales at any cost, then that person will sell a lot of cars regardless of whether the sales pitch damages the brand. Being industrious has its pluses and minuses: we need people to get things done. We do not need people who are industrious doing stupid, brand-demeaning things. We do not need people to get the wrong things done in the wrong way.
Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?
Light: There is a lot being written today about leadership. Not everyone agrees on what a good leader needs to do or not do upon taking control. However, one thing on which most agree is humility and lack of hubris. Group-think may have its proponents, but at the end of the day, it is the leader who makes the call. Collaborative decision-making is what our book, New Brand Leadership, is all about. Collaboration is essential to business effectiveness. Organizational silos inhibit business effectiveness. But, someone needs to be accountable. Leaders must lead.
Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”
Here’s my question: How best to avoid or overcome such resistance?
Light: Our Collaborative 3-Box Model highlights two important things. Effective leadership today is not about command-and-control. In a collaborative culture, the role of leadership is built on five pillars: inspiration, influence, support, education, and evaluation. Second, when it comes to culture change, it is the responsibility of the leadership to be open and forthcoming and tell people why the change is important, what they must do differently and what this all means to each one of them.
Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?
Light: First, there is a collision of three conflicting forces sweeping the marketing world: Incrhttp://employeeengagement.ning.com/profiles/blog/new#eased globalization, increased localization, and increased personalization. It will be a great challenge to manage in an environment where these forces are happening simultaneously. Second, building trust. Trust is in serious trouble. Trust in established institutions is in decline. As a result, brand loyalty is in decline. Brand loyalty is about an enduring relationship, and every relationship is built on trust. Building brand trust on a foundation of consistency, integrity, responsibility, and leadership will be a competitive advantage.
Morris: Now please shift your attention to New Brand Leadership. When and why did you and Joan decide to write it?
Light: At Arcature, we work and have worked with many multi-national, global companies. There is always tension between regions and HQ. Responsibility and accountability are debated. People fight for internal control and power rather than fight on behalf of business effectiveness. Silos prevail. We see the problems and understand the tensions. We appreciate the challenges and have created a way to be successful. We experienced the stalemates, the turf battles, and the heel digging that comes with a non-collaborative culture and lack of clarity as to the allocation of responsibilities and resources. Businesses cannot thrive in this environment. We lived it and Joan and I decided to write about what we know works. Working together works better
Morris: The book’s subtitle refers to a convergence of globalization, localization, and personalization. In your opinion, what are the primary causes of this convergence and what is its unique significance?
Light: Which comes first? Do changing consumers change the environment or do changing environments change consumers? The answer is both. Consumers are changing. They are more knowledgeable, more demanding, more questioning, more skeptical. They appreciate that we live in a global world. Yet, they do not want to lose local identity. And, they want their personal uniqueness to be respected. At the same time the marketing world has changed. Technology is the engine of these changes. The Internet facilitates access to information. Mobile technology is personal technology.
The fact is that these three forces exist and business must react in an intelligent, cogent way to satisfy customers. We know that we are a more global world: the Internet has defied distance. But at the same time, we do not want to lose what we see and feel and know from what is around us. We want to be a part of a distinctive local community. Yet, we have desires of uniqueness and this spurs personalization. I am unique even though I am part of something bigger. No single element takes precedence. What is important is that we do not control how the world changes. We can control how our brands live in that world and manage to succeed.
Morris: What are the defining characteristics of traditional brand leadership?
Light: Command and control. I am in charge: I am the one. Follow me. When we worked with W.L. Gore, we learned that you could not be a leader unless you have actual, committed followers.
Morris: For the non-marketers who will read this interview and then (hopefully) your brilliant book, what differentiates your approach to brand marketing from everyone else’s?
Light: We have a unique perspective. We have worked on the agency side, the consultant side, the client side as well as teaching in executive education and in Universities. Based on this multi-faceted experience, our ideas are not ivory-tower ideas. They are based on practical, relevant, real-world experience.
Morris: You examine five “game-changing trends” in Chapter 5. In your opinion, which of them seems to have created the most serious problems? Please explain.
Light: Demographics. Everything else can in one way or another be connected to demographics. Mostly marketers look at demographics in big broad strokes. Look at the demographics behind the demographics. Ignore the intricacies at your peril. Look at Europe with the migrant crisis. Most of Europe has a demographic problem. They need younger people with skills and younger people who can have children. Do we all want to end up like Japan with over 50% of the population age 65 and over? Demographics matter. Yet, they are often relegated to a few questions at the end of a research survey followed by glittering generalities about big groups like Boomers or Millennials.
Morris: I am among those who believe that trust is the “glue” that sustains our most important relationships. I also think there is less trust within our society today than at any prior time that I can remember. Do you agree? If so, how do your explain it?
Light: Trust is the essential ingredient for companies and brands. Year after year after year, we see decreasing institutional trust. Only now are people waking up to the fact that trust is crucial. Just look at the headlines: GM has a trust problem; VW has a trust problem; McDonald’s has a trust problem. Business, government, education, medical, and pharmaceutical institutions have trust problems. Without trust, nothing else matters.
Morris: How do you define brand trust and why is it so important to commerce?
Light: A brand is a promise of a relevant and differentiated experience. Brand Trust is the confidence people have that the brand will live up to its promise.
Morris: How do you define organizational trust and what is its unique significance to employees’ personal growth and professional development?
Light: When a person joins an organization, they have certain expectations associated with that organization. Organizational Trust is the confidence employees have that the organization will live up to expectations. Organizational Trust contributes to employee pride. Proud employees are more loyal and more effective. Employees prefer to work in an organization they can be proud of. They will recommend the organization to friends. They are eager to contribute to the growth of the organization and look forward to growing with the organization. They expect that the organization will contribute to their growth in return.
Morris: What is its unique significance to customer relationships?
Light: All relationships are built on a foundation of trust. Without trust the relationship is not sustainable. Without trust, the brand will have higher perceived risk. The brand will have to compensate for the higher risk by competing on price alone.
Morris: What is a brand framework? When and why is it needed?
Light: The Brand Framework defines the brand ambition, the brand promise, the brand dimensions, the brand segment, the brand architecture, the brand executional boundaries, the brand priorities, the brand policies. The Brand Framework does not stifle creativity. It focuses creativity. We encourage freedom within the framework.
Morris: Why build a brand business scorecard? What are the most important dos and don’ts to keep in mind when designing and building one?
Light: We recommend developing a brand-business scorecard consisting of three dimensions: bigger, better, and stronger. For each of these three dimensions there should be specific brand metrics and business metrics. The most important consideration is to keep these as one combined brand-business report. The most important “must not do” is to have misalignment between the scorecard and the reward system. It is a cliché to say that “managers do what management measure.” This is incomplete. “Managers do what management measures and rewards.”
Morris: Of all the bad habits that inhibit brand building, which one seems to have the greatest impact? Please explain.
Light: The biggest bad habit is to grow brand revenues at any cost. Excessive dealing and discounting builds deal loyalty not real loyalty. The total cost of some growth can prove to be prohibitive.
Morris: There are dozens of passages throughout your narrative that caught my eye. For those who have not as yet read the book, please suggest what you view as the most important point or key take-away from the book.
Light: Silos are for storage. The origin, original meaning of “silo” is a pit, or underground structure, for storing grain. Organizational silos serve the same purpose. They are cultural pits that are created to store ideas. They inhibit sharing and collaboration. It is all about stay out of my silo and I will stay out of yours. Organizational silos are a cultural disease. Break these silos down! Collaboration beats isolation.
Morris: Trust in a World of Distrust and Mistrust
Light: Trust is critical. All relationships are built on trust. Lose trust and nothing else matters. This is true whether we are talking about relations with brand, customers, employees, investors, media, vendors, or community. There are three common forms of capital: financial capital, human capital, and intellectual capital. We need to add to these three a fourth source of capital – Trust Capital.
Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in New Brand Leadership, which do you think will be of greatest value to leaders in small companies? Please explain.
Light: Whether a business is small, large, local, global, low tech, high tech, product, or service, there are certain fundamental principles that apply across all businesses. For example, the foundation of modern marketing is customer-driven market segmentation. Another example is principles of great leadership. Leaders have to lead by serving others’ needs and best interests. Command-and-control does not work any more. Great leaders inspire, influence, educate, support, and evaluate. These and other principles in the book apply across italics] all businesses, whatever their size and nature may be.
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Larry cordially invites you to check out the resources at these websites:
Link to Larry’s Wall Street Journal article, “How to Revive MacDonald’s”