How marketers can improve their impact and influence

With confidence in marketing hitting a low point, how can the industry change negative perceptions and reclaim customer trust?

From data hacks and the Cambridge Analytica scandal to ad bombardment, influencer fraud and brand safety issues, the crisis of confidence in marketing remains a persistent concern.

Public perceptions of advertising, for example – granted it is just one aspect of marketing – have been in decline for decades; from a 50% favourable perception in the early 1990s to just 25% in 2018, according to statistics from the Advertising Association (AA).

Marketers’ influence and reputation internally is also suffering. The fact brands including McDonald’s, Coca-Cola, Johnson & Johnson and Uber are getting rid of the CMO role, instead splitting the top marketer’s responsibilities across less senior, non-C-suite executives, should ring alarm bells.

It suggests Fournaise’s often-cited research that 80% of CEOs do not trust their marketers remains a cause for concern.

The rise of alternative titles such as chief customer officer and chief growth officer have also diluted the relevance of the CMO.

As Marketing Week columnist Mark Ritson puts it: “With the CMO position, we had a rare opportunity to make marketing into an established, strategic and senior function within most companies. No surprise then that a bunch of idiot marketing commentators spent the past few years critiquing the role and suggesting it needed to be retitled for the new challenges of the 21st Century.”

With trust undoubtedly in decline, marketing is at risk of losing its positive influence. It is not too late to turn the situation around, but marketers need to work hard to reclaim consumer trust, forge stronger bonds with the C-suite and enhance the impact of their work. That is the advice of the judges of Marketing Week’s Top 100 Most Effective UK Marketers, sponsored by Salesforce.

Source: https://www.marketingweek.com/marketers-impact-influence/

‘Scattered hotels’ offering village-type stays are taking off in rural Japan

A recent trend in the tourism sector that lets visitors stay in re-created traditional villages while experiencing local cuisine and cultural activities is growing in popularity in Japan.

The “scattered hotel” business is believed to have originated in Europe, and Maruyama Village — a facility that opened in 2009 in Sasayama, Hyogo Prefecture — is said to be the pioneer in Japan. Users of the facility can partake in activities such as agriculture, pottery-making and tea ceremony while staying at renovated traditional houses.

In Mino, Gifu Prefecture, which flourished with the production and trade of high-quality washi (Japanese paper) during the Edo Period (1603-1868), a traditional century-old house that belonged to a washi merchant was renovated into an inn. The inn opened in July and is named Nipponia. An association of local paper manufacturing companies is involved in the operation in a bid to promote the charms of Mino washi.

Many old merchant houses still stand in Mino. The front desk of the hotel is located in another renovated traditional house, while a vacant traditional house nearby is currently being renovated to become the second accommodation facility for the hotel. Six hotel rooms can be used, each by up to seven people. Rates start at ¥20,000 per person.

Jun Mizuishi, a 36-year-old resident of Saitama Prefecture, used the hotel for group training. “We could fully enjoy Mino by experiencing local cuisine and Mino washi-making, as well as by enjoying local landscapes,” Mizuishi said.

Scattered-style hotels are also found in Kyoto; Otsu, Shiga Prefecture; Obama, Fukui Prefecture; and other areas. Preparations to open such a facility are currently underway in Hokkaido and Kumamoto Prefecture.

Airi Ishikawa, from travel website Ikyu Corp., said scattered-type hotels are growing in popularity because business collaborations with local entities tend to work smoothly because of the expectation that such projects will help revitalise local communities and breathe new life into abandoned buildings. Those involved in the business are also hoping that it will encourage foreign tourists to visit their communities.

Source: https://www.japantimes.co.jp/news/2019/10/02/national/scattered-hotels-rural-japan/#.XZSuLS2B2Rs

Collaboration Is Key: Why Tourism Boards Should Be Working With Airports

The expansion of route networks is always a key goal of any airline, but unless aircraft can be filled with passengers, that route will never be a success. We take a look at how airlines, airports and local tourism boards can and should be working together to develop healthy routes that really stimulate tourism.

Tourism and aviation are intrinsically linked

While the launch of a new route is often seen as a deal done between an airline and airport, there is a third even more important partner who needs to be involved. Tourism boards are responsible for stimulating visitor numbers and will have their own needs and strategies which airlines can look to support.

According to IATA, out of 1.4bn tourists crossing borders every year, more than half (57%) will arrive by air. Tourism stimulated by aviation is evaluated to have created approximately 37m jobs worldwide, and to contribute around $897bn a year to global GDP, a share of 10.4%. Between now and 2036, IATA expects this to rise by 3.7% annually.

IATA also point out that, if tourism is well managed with a strong support by air transport, it can reduce poverty levels through stimulated employment and associated benefits. It points to examples of Cabo Verde, Maldives and Samoa, nations which have graduated from Less Developed Countries (LDC) status, driven by the strong growth of aviation supported tourism.

Collaboration is the key to success

Airlines shouldn’t simply launch new services to random destinations. While noting gaps in service provision can be a good starting point, only through close collaboration can that route be assured of success.

By working in collaboration with local tourism boards and authorities, airlines and airports can develop strategies that not only meet the goals of the airline and its passengers but also stimulates tourism to the county in a measured, sustainable way.

Boosting tourist numbers won’t necessarily happen just by laying on a new route. By working alongside tourism boards, airlines can increase public engagement and awareness via well thought out campaigns. On the other side, tourism boards can ensure aviation is in line with economic development planning to drive growth.

Increased numbers of tourists require facilities and infrastructure equipped to handle additional footfall. This ranges from a plentiful supply of hotel rooms to decent airport road and rail networks, again something that will only come about through joined-up working and planning between stakeholders.

How tourism boards can connect with airlines

While tourism boards and airports have become increasingly sophisticated in terms of marketing and promotion, there is often still a gap in communication between them and the airlines which serve their countries. Airlines are more frequently looking to connect beyond the airports alone when considering new routes and are actively seeking to engage with tourism boards to inform and support their development.

One forthcoming event is aiming to take the hard work out of making and maintaining such connections. This months’ AviaDev Europe conference offers a chance for airlines to meet with both airports and their tourism boards to discuss future strategies and kick off route development for the future.

As part of the event, AviaDev will host a special Air Service Development Workshop for Tourism Boards on the first day of the event, 23rd October. Here, tourism boards can develop a better understanding of the process involved in route planning, helping them to work more effectively with airports and to secure connectivity of their destinations.

Hosted by TURISMO VALENCIA, the workshop promises to provide a comprehensive starting point for tourism boards looking to develop their aviation know-how. TURISMO VALENCIA themselves are a prime, working example of how this strategy can pay off. AviaDev is hosting the workshop free of charge for tourism authorities. More information is available at the event website.

Source: https://simpleflying.com/tourism-board-airport-collaboration/

Can Saudi Arabia rebrand itself as a tourism hotspot?

It’s got year-round sunshine. It’s got incredible beaches. It’s got ancient historical sites. It’s got theme parks. It’s got luxury hotels. It’s got adventure. It’s got relaxation. So why isn’t this destination a hotspot for tourists?

Because it’s Saudi Arabia, and until now, unless they were making a religious pilgrimage to Mecca or were in town for business, tourists weren’t exactly lining up to visit. The country’s international reputation as a human rights black spot, its conservative laws that restrict the freedoms of women and the regional tensions that recently resulted in attacks on its oil industry, are not exactly travel brochure selling points. But Saudi Arabia wants all that to change. The Arabic kingdom is throwing its doors wide to international tourism in an attempt to rebrand itself as a travel destination to rival Gulf neighbors like Dubai, Oman and Abu Dhabi.

As of September 27th, travelers from 49 different countries will be able to enter Saudi through an e-visa and visa-on-arrival. Behind the move is a long-term plan to steer the country’s economy away from its reliance on the petrodollars that have flowed since the 1930s. If tourism matches Saudi dreams, millions will come, bringing new jobs, new wealth and, potentially, a whole new way of life.

The Saudis call this plan Vision 2030. In just over a decade, they expect annual visitors to reach 100 million – twice the number of people who currently travel to Italy each year, boosting the local economy to the tune of billions of dollars. “This is a game-changer for the Saudi tourism industry, which previously only catered for international tourists either for religious or corporate purposes,” says Imad Damrah, managing director of real estate agents Colliers International in Saudi Arabia. Will the tourists come though? Much stands between the kingdom and its dream of becoming a popular destination, not least its spotty human rights reputation, heightened after the 2018 killing of journalist Jamal Khashoggi in the Saudi Embassy in Istanbul.

Human rights groups like Amnesty International have, as recently as 2018, reported that “authorities severely restricted the rights to freedom of expression, association and assembly.” Recent drone and cruise missile strikes on Saudi oil facilities have raised new concerns about the security situation in the country, underscoring government travel advisories, like the US State Department’s, which warn visitors to be wary of terrorism and attacks on civilian targets. Saudi authorities won’t respond to direct questions about such issues, preferring to focus on the change ahead. “Saudi Arabia is at the beginning of its journey as a tourism destination,” a spokesperson for the Saudi Commission for Tourism told CNN.

To help pave the way, the country’s leader, Crown Prince Mohammed bin Salman, has been enacting a series of cultural reforms, restricting the powers of its religious police, allowing mixed gender pop concerts and issuing driver’s licenses to women. The country is also throwing huge sums of money at “giga” developments like the Red Sea Project, a plan to transform a huge area of Saudi’s western coast into an uber luxurious desert, island and mountain resort with its own airport. “The Kingdom is investing heavily in tourism infrastructure,” says John Pagano, CEO of the Red Sea Development Company, which is overseeing the development. The 28,000 square kilometer Red Sea Project alone is projected to create 35,000 direct jobs and 35,000 indirect jobs, and contribute an estimated $5.8 billion per year to the kingdom’s economy, says Pagano.

Two other mega-developments are also in the works to draw leisure travelers. The vast $500 billion metropolis of Neom will span three countries and is intended as an automated tech paradise where people move around using self-driving cars and passenger drones. Qiddiya, under construction near Riyadh, is billed as the world’s biggest entertainment city. It has already lined up a Six Flags theme park that will feature what’s claimed to be the planet’s fastest roller coaster. The country can also capitalize on its extensive historic and geological attractions. Saudi Arabia is home to five UNESCO World Heritage Sites: the 10,000-year-old Rock Art in Hail; Al-Ahsa, the largest oasis in the world; Al-Hijr Archeological Site; the citadel of At-Turaif District; and Jeddah Old Town. It also has experience in installing modern transport links, with recent upgrades to the network built to handle the Hajj, an annual pilgrimage to Mecca in Saudi Arabia that attracts over two million people.

Comparisons to the dramatic transformation of Saudi’s UAE neighbours – now seen as well-established tourism destinations catering to a variety of budgets and interests – are inevitable, but experts say that while there will be some overlap, they’re not necessarily catering to the same markets. “Saudi Arabia will never outshine Dubai, but I don’t think it wants to,” says Kevin Newton, executive director of Newton Analytical, a company that provides analysis on the Islamic world. “It wants to focus on family-friendly activities. This helps build Saudi Arabia’s reputation with the Muslim world, but also shows that the country is so much more than oil and the Hajj.” Newton says Saudi officials know that their initial market will be other Muslim countries. “That does not mean that Westerners – or anyone else, for that matter – are being ignored,” he adds. “Because of the Hajj, many Saudis in the hospitality industry already have a number of skills that can quickly apply to more general tourism, principal among them proficiency in English.

“Given that the promotional material for Neom features women wearing Western workout and leisure attire, it is clear that Saudi Arabia is seeking to attract a professional class of tourist who would otherwise frequent Dubai.” Yet will all of Saudi Arabia’s recent controversies harm the country’s goal of becoming a tourist hub? “Yes and no,” says Newton. On the one hand, he adds, a controversial reputation is never good for tourism. “On the other hand, Saudi Arabia is aware that the world has a short memory.

“Right now, Saudi Arabia’s decision to list [Saudi national oil company] Aramco publicly is gaining much more traction than any lingering stories about the Khashoggi assassination.” Several major challenges stand in the way, Newton continues. This includes Saudi Arabia’s ban on alcohol, which other Gulf Cooperation Council states allow. “Also, while considerable progress has been made in the past two years, women’s rights are still not on par with international standards,” he adds. Tourism will be driven by more adventurous types, continues Newton. “Luckily they have the potential to be more likely to spend more, and Saudi Arabia still has a lot to offer them beyond another stamp in their passport.”

Laura Alho, a Finnish expat and travel influencer based in Saudi Arabia, is one of these adventurous travelers. Alho moved to Saudi Arabia in 2008, despite everyone telling her not to go, she says. “The image of KSA was not very positive back then, but I decided to go and find out for myself what it’s really like, instead of listening to the opinions of people who had never even been there,” she adds. “Saudi Arabia is one of the last unexplored regions on Earth. Full of history, unique culture, and diverse landscapes,” she says. “The fact it felt mysterious and unexplored appealed to me as well. From the very first day I arrived in Saudi, I began exploring, and haven’t stopped to this day.”Alho shares her Saudi-focused travels on social media to nearly 63,000 followers, and says that curiosity around KSA has been growing.”I get contacted almost daily by people interested in traveling to Saudi Arabia.”

Marc Nouss, a Paris-based travel photographer and social media influencer, has traveled to Saudi Arabia twice on sponsored press trips. “I was a bit full of stereotypes regarding the country, so I had only good surprises,” says Nouss, who shared his travels to 100k followers. Nouss visited the historic desert of Al-Ula and the mountains of Al-Soudah. “The kindness of the people living there was the most beautiful. I travel a lot but this country is on my top two for the kindness of its inhabitants,” he says. “Saudi Arabia is preparing to open tourism to visitors,” adds Nouss. “This is pretty obvious. And honestly they will do well, as this country is rich in culture and history.” 

Source: https://edition.cnn.com/travel/article/saudi-arabia-rebrand-tourism/index.html

Building Real Relationships To Empower Female Leaders

The Fellows Program selects top-performing women from around the world in an effort to connect them to each other, as well as other female executives and members of the IWF, through mentorship, education, and the execution of a personal legacy project. The customized leadership training includes two week-long executive educational modules at the Harvard Business School and INSEAD designed specifically for female leaders. 

“The program with the IWF makes you collaborate together so quickly and so intensely, that I guarantee that even if I don’t see any of these women in three years, I will be able to pick up the phone and say that I need their advice, and the conversation will flow like we saw each other just yesterday,” Laurier said. 

The members of the current cohort of IWF fellows hail from 12 different nations, including the United States, Turkey, and Jamaica. Yet, the group’s international character has not prevented them from forming a connection that transcends their cultural differences. 

“To be with other women in this same position, there is a sisterhood of sorts that develops,” de Oliveira said. “We support each other a lot because we see that we face the same barriers everywhere in the world.”

These sincere partnerships are invaluable to the women in both their professional and personal lives. Laurier feels that it is imperative to work at relationships by being curious and honest—a belief that the IWF’s mentorship component has only reinforced.   

“It’s so important to build real relationships with people that are going to want to be generous toward you and who you will be connected with,” Laurier explained. “And eventually you’ll be able to help them too and return that favour. But it’s not a simple exchange, it’s a relationship that you invest in.”

De Oliveira also believes in the transcendental power of meaningful relationships in the workplace. Her vision of leadership contrasts leading and managing as having two distinct effects on employees: managing will get the work done, but leading will push people to new heights. She herself has come to realize how much of an effect she can have by broadening her horizons beyond pure productivity.

“This program has made me realize that it’s important to focus not just on work but also to leverage the capital that you gain from your work to advance social causes like diversity,” de Oliveira mused. 

The legacy project that each fellow completes advances the social agenda that the women’s leadership can contribute to. De Oliveira is working with a professor from her alma mater, the École Polytechnique de Montréal, to encourage more women to join the university as leaders and instructors. 

“The beauty of diversity is to bring something new to the table,” de Oliveira elaborated. “What we want to see is different generations, cultures, and genders. That’s when you get the most out of a group, but it can be hard to put together that kind of team. That’s why the legacy project is about using our social capital and power to contribute to society in some way.”

While the two participants appreciate the bond that the program fostered among its participants, they found that the women-only environment also illuminated the necessity for gender diversity in the workplace. 

“We often found ourselves thinking we need the perspective of the men here,” she said. “A workplace with just men or just women doesn’t reach the right equilibrium. Men are typically better risk-takers, but they go too fast. Women will rely on facts. So, what you need is someone who is able to say, ‘let’s do this,’ but also someone who is able to take the time and consider the blind spots of a decision. That’s what makes a good team.”

Despite their plentiful careers, both Laurier and de Oliveira remain humbled by the opportunity to participate in the fellowship. When touring the Harvard and INSEAD campuses, Laurier recorded videos to send to her family as a thank you for enabling her to make it to two of the world’s best business schools. 

“If you stop pinching yourself in life, that’s when you stop being a good leader,” Laurier said. “You can’t take anything for granted. Leadership positions are filled with opportunities and you have to be grateful for that, always.”

Source: https://www.forbes.com/sites/karlmoore/2019/09/27/building-real-relationships-to-empower-female-leaders/#5d65b51e3151

Foodservice leaders on the impact of Brexit on the restaurant industry

With the uncertainty of a potential no-deal Brexit drawing closer, leaders in the restaurant industry are becoming less confident about their sector, with only 30% optimistic about the future of the general market, according to insight consultancy CGA’s latest quarterly Business Confidence Survey.

Verdict Foodservice spoke with industry professionals about the impact Brexit is and will have on the restaurant industry.

John Trueman, CEO of leading guest management system Quadranet Systems, has been in the restaurant industry for decades

“Aside from the obvious concerns restaurant and hotel owners have about the European migrants currently working for them, whose future remains uncertain, the impact on staffing has already been negative. Europeans are returning to their native countries rather than face uncertainty, making the pool of staff available to the industry ever smaller.

“Brexit is already having a seismic impact on our sector in other ways, too: the devalued pound is naturally resulting in fewer people eating out, choosing instead to pinch their pennies until after 31 October or whenever Brexit may be, when they will be able to assess what their disposable income looks like.

“Many of us feel left in the dark and planning for the future has become nigh on impossible. Brexit would be bad for hospitality, but uncertainty is worse. The sooner we have some clarity on what lies ahead, the better.”

Peter Hale, spokesperson for Business Electricity Prices (BEP), which specialises in helping businesses reduce their energy bills 

“With businesses seeing an average of a 43% increase in their electricity bills over the past ten years, and Brexit’s uncertainty lurking around the corner, it’s no wonder business owners are looking for smart ways to cut costs.

“The hospitality industry, especially restaurants, could potentially see a big change in their number of covers, as dining out is a luxury that people to tend to cut out when tightening their belts. In order for the restaurant industry to have the best chance of survival, it is important to look at cuts that will not affect quality of service.”

Chris Miller, founder of White Rabbit Fund, a creative development platform that backs and invests in food entrepreneurs 

“Without question, Brexit is a disaster for the hospitality industry in the UK.

“We have already seen increases in the cost of ingredients. Be that driven by the declining value of the pound, or simply giving suppliers a good reason to trigger raises. Under a no-deal scenario, with the implementation of tariffs, this will only get worse.

“As for the staff, a lot of our best staff are from Europe. Where they would often come to the UK to work and send some money home, with a weaker pound this is a less attractive proposition. In addition, I do believe there is a factor of feeling unwelcome. So, where many workers went back home over the summer, they simply are not coming back in the same quantity. This is creating a real shortage of staff.

“In the UK, hospitality has not been seen as a career and there simply isn’t the local talent pool to fill vacancies. The result comes from economics 101 – shortage of supply means increased price – so we will continue to see inflation in staff cost.

“The picture does not look good and I think it is pretty clear we are heading into a recession. We are ten years into a bull run when historic averages show recessions happen every seven years.

All that said, people still need to eat and drink. The restaurant market will not disappear, but there will be a massive shakeout. Operators really have to be at the top of their game to survive and prosper in these challenging times.”

Gareth Ogden, partner at haysmacintyre, who has 12 years’ experience in hospitality and advises his restaurant clients on topics such as financial planning for Brexit

“The restaurant industry is currently facing complex challenges. When we speak to operators the most common buzzword is ‘uncertainty’ which is partly, but not entirely, attributable to ongoing Brexit deliberations.

“Economic uncertainty is a serious concern in respect of its impact on consumer demand. The impact of Brexit on food costs is also causing anxiety, dependent as it is on the nature of the final Brexit outcome: deal, no-deal or no Brexit. Both of these factors are holding back many operators from further investment as they wait to see how the political situation plays out.

“However, it is the uncertainty over staff recruitment which is perhaps most obviously being felt currently. The uncertainty over the impact of Brexit on the availability of labour is compounding an already prevalent problem: recruiting good quality staff, including chefs.

“In the 2018 haysmacintyre UK hospitality Index, 77% of respondents stated that they felt Brexit would negatively impact their ability to recruit staff. Initial results for the 2019 Index suggest this figure has increased to over 80%. Operators are seeking clarity over the Government’s immigration policy and whether freedom or restriction of movement of labour from the EU will ultimately prevail.”

Jamie Shail, managing director at Rothay Manor Hotel & Fine Dining 

“Since the referendum one of the biggest impacts on the hotel and restaurant industry has been the shortage of staff. We rely on a pool of talent from European countries, and not only have they felt unwelcome, the euro-sterling exchange rate has meant a 20% decline in their salaries, and many have made the decision to return to their home or other European countries.

“The UK doesn’t have the experienced workforce to replace them. It is also this decline of sterling against the euro which is currently leading to higher costs of imported food goods. We have seen a significant price rise on many food products from dairy to fish.

“If the UK leaves the European Union with a ‘no deal’ along with the continued staffing issue, which may, in fact, get worse, we will also suffer a serious supply and demand problem. With the UK falling into WTO regulations this would immediately increase the price of imported foods by 20% and many imported products could be left at ports while lengthy checks are carried out.

“We are also likely to see further price rises from the continued decline in sterling and the increased demand for the limited production in the UK, with in excess of 30% of food products being imported.”

Source: https://www.verdictfoodservice.com/features/restaurant-industry/

Thomas Cook: tourism experts explain the travel company’s collapse

The shock of Thomas Cook’s collapse may create reverberations that travel much further than the 150,000 holidaymakers who are reportedly stranded overseas or the many people who have already paid for travel with the company. The impact of Thomas Cook’s failure is even more stark because the company’s 19th-century founder was the father of package holidays, taking the first group of travellers abroad in 1855.

On the bright side there is a scheme in place to help them. When tourists buy their holiday as a package the law requires that it is protected. ATOL is a UK scheme, which was first introduced in 1973, that covers most air package holidays and some forward booked flights sold by UK operators. 

The ATOL scheme currently provides protection for more than 20m travellers each year. The benefits of ATOL are far reaching and include bringing stranded tourists back to the UK if the company they bought their package from goes into liquidation while they are overseas or will compensate or find alternative packages if the company fails before the traveller goes overseas. 

The term package is important because if a traveller purchases, say a flight only, from a travel agent or directly from an airline and is issued with a valid ticket, this is outside the scope of ATOL. So independent travellers (people who book the different components of their holidays would not be covered by ATOL unless the flight or hotel element explicitly states that it is ATOL protected). ATOL is funded through a levy on travel businesses of £2.50 per traveller and it is operated by the UK Civil Aviation Authority (CAA) regulator and the funds are held by an organisation called the Air Travel Trust.

The ATOL protection was introduced in response to several major travel business failures, which left British travellers stranded overseas, but to date has not had to cope with a failure on the scale of this Thomas Cook one. The major task of organising the repatriation of so many people, code name “Operation Matterhorn”, has meant that the government (through the CAA) has had to hire planes from as far away as Malaysia to help transport not just the holidaymakers but also the thousands of staff who are also stranded overseas. This is the largest peacetime repatriation the UK has ever undertaken, and it is inevitable that there will be delays and problems during the operation that is being hastily put together.

Although the company’s products are ATOL protected there are limits to the cover and to many people who had planned their vacations, the financial costs are only a part of the problem. For instance, there are people who were travelling to get married, attend funerals or other significant functions who may not be able to easily make alternative arrangements and if events are cancelled there will be costs not covered by ATOL.

As with most things, there is rarely a single cause for such a big failure. This can be seen as a perfect storm for Thomas Cook. It was already stretched from earlier operational changes, some of which can be taken back to its merger with MyTravel Group in 2007 and others that demonstrate the changing nature of travel throughout the 21st century. 

This changing nature also includes the growing intensity of competition in the travel-related sector. Tourism businesses operate on high volume sales with small profit margins – that is to say they need to fill seats on planes and rooms in hotels to make a profit. One empty seat is dead weight and eats into whatever slim profits are derived from all the other seats and rooms sold. 

While the ultimate responsibility for the business failure of Thomas Cook must rest with the hands of its management, they faced a number of factors outside their control. The effects of the Brexit discussions, together with a poor economic growth rate, have resulted in a much weaker pound. This has meant higher costs for the overseas travel industry, putting even greater pressure on their already slender profit margins. 

The size of Thomas Cook brings the obvious advantages of economies of large-scale production. But while it may prosper in growing business environments, with a declining market and increased competition from the rapid growth of AirBnB and numerous specialist travel agencies and tour operators, size can become a burden. The vagaries of the UK’s weather also played a part, with record temperatures fuelling a rise in staycations and curtailing demand in a market with ever-increasing sources of supply.

Source: http://theconversation.com/thomas-cook-tourism-experts-explain-the-travel-companys-collapse-124054

The Power of a Clear Leadership Narrative

Great leaders build amazing communities. They do so in a variety of ways and over an extended period of time. One of the most effective tools to accomplish that is to shape and articulate powerful narratives of what’s possible. Effective leaders share stories about what great leadership looks and feels like when individuals come together as teams, and teams come together as communities, with a unifying sense of purpose and collective ambition. 

This insight has emerged from both survey data and dozens of C-suite-level interviews as part of a major global study, Future of Leadership in the Digital Economy, that MIT Sloan Management Reviewis conducting with Cognizant. In this new world of work, where being connected and resilient are of paramount importance, 82% of our global survey respondents and virtually all of those interviewed indicated that an individual in the digital world would need a certain level of digital savviness to be an effective leader. Yet, when asked what skill or behavior was the mostimportant to leadership effectiveness, the answer was being able to articulate a clear sense of purpose, vision, and strategy. What at first seems old is new again: Clarity of communication in a hyper-speed world is a key difference maker in the eyes of current managers and leaders from around the world.

To gain a better feeling of the texture that forms the fabric of this insight, consider this comment from Susan Sobbott, former president of American Express Global Commercial Services: “In the digital economy, physical presence can’t be mandatory to be an effective leader. You have to be able to lead people from many different cultures, in many different locations, and often with imperfect information because things are moving so fast,” she says. Her simple and elegant solution to this decades-old challenge reflects the power of a clear leadership narrative. “You have to be able to see a story emerging and to articulate that story in a way that has meaning and inspiration for a wide range of people. You have to convey your passion and beliefs through a powerful narrative.”

Why Finding Your Leadership Narrative Is Important

We analyzed our survey responses from more than 120 countries and conducted a sentiment analysis and heat-mapping exercise to identify the most important leadership behaviors in this new economy. The traits that emerged were authenticity, transparency, trust, inspiration, the ability to connect and invest in others, analytical capability, curiosity, and courage, among others. Few would argue that these behaviors and attributes are necessary, yet by themselves, standing independently, without the context needed to create meaning or catalyze change, they run the risk of being considered buzzwords. Stories help prevent that from happening, and that’s where the power of creating your leadership narrative comes into play. Developing a powerful narrative demands that you, the leader, take a stand on what you believe in, what you are about, and what impact you hope to create as you set out to form teams and build communities. The leader behaviors and attributes listed earlier become your means of communicating to others who you are, as well as your expectations for others concerning how you will lead together in your organization. It’s about finding and sharing your voice.

In a recent interview with CNN’s Anderson Cooper, late-night comedian Stephen Colbert talked about his search to “find his show.” For months his show struggled in the ratings, not because it lacked comedic appeal or impact, but because it had no thesis or arc that held it together. Once he and his writing team took a stand on what they believed in and followed through on those beliefs transparently, authentically, and courageously, Colbert believes they found their show, and since then he has commanded the No. 1 slot in the ratings. To find your personal leadership narrative, you need to figure out what great leadership means to you. David Schmittlein, dean of MIT’s Sloan School of Management, made a similar point while being interviewed for this study. “A great leader must be willing and able to display the courage it sometimes takes to stand by well-founded convictions — to take a stand on a decision that may be unpopular,” Schmittlein states. “It is about finding your narrative — what you believe in — and not being a willow in the wind. A well-thought-out leadership narrative helps create meaning and motivation for others.”

How we work is changing, but why we work and what we hope to achieve through our work remain largely the same. We want to be part of something larger, something special, something that helps make this world we live in a better place. Your leadership narrative can motivate others in important ways. Finding your narrative — one that expresses authentically, transparently, and courageously what you believe in as a leader, what you are about, and indeed what you are willing to fight for — will let you begin to unite individuals into teams, and teams into amazing communities.

Source: https://sloanreview.mit.edu/article/the-power-of-a-clear-leadership-narrative/

Artificial intelligence can now pick stocks and build portfolios. Are human managers about to be replaced?

Outside of their ability to understand a company’s fundamentals, one of the skills Raj Lala appreciates most about his portfolio managers is their ability to interpret body language.

Sitting across from management teams before making a decision to either invest or divest from their companies, Lala, the CEO of Evolve ETFs, said his portfolio managers can learn a lot from simply reading the room. Maybe they spot a nervous twitch after a question on guidance or a CEO unable to make eye contact when responding to a question about declining revenues.

That very human capability was at the forefront of Lala’s mind when he was recently pitched on two types of artificial intelligence that he could incorporate into his portfolio management processes. And it’s one of the reasons he said no.

“I can’t see AI getting to that point where it replaces human interaction and, quite honestly, I would say god bless our world if that’s the case,” Lala said.

Despite Lala’s skepticism, AI technology that can manage portfolios already exists to some extent and is beginning to be deployed.

In 2017, San Francisco-based firm Equbot LLC launched its AI Powered Equity ETF, which assesses more than 6,000 U.S.-traded stocks per day and decides where to invest based on its analysis of regulatory filings, earnings, valuations and other fundamentals.

Weeks later, Horizons ETFs launched the first AI ETF in Canada, where the AI is responsible for building a portfolio from 32 global equity ETFs based on its analysis of money flow, volatility and moving averages. Here, however, a human is required to pull the trigger on any trade.

Both ETFs are currently trading below the value at which they first opened in 2017, something that is certain to give fuel to skeptics who believe that while AI has made incredible strides in the last few years, it simply is not yet ready to make the job of a portfolio manager defunct.

One reason, according to Stuart Sherman, is that there are too many variables within stock picking that cannot be programmed into an AI process.

Sherman, the CEO of Toronto-based AI firm IMC Business Architecture, compares the challenge to a report in the Guardian which said that a cat received better investment returns than three portfolio managers and high school students in a 2012 challenge.

In that same time, AI could also outperform humans in the role of a portfolio manager, but it wouldn’t really prove that it was better unless it was able to consistently beat them by double digits over a period of multiple years.

“It could work for a while,” Sherman said. “But the cat will work for a while. Eventually, it’ll regress to the mean.”

Sherman described AI as a pattern recognition tool and said that to build one that could manage a portfolio, a developer would have to start with a “ground truth.” Essentially, a programmer has to show an AI hundreds, or even thousands of examples of what a good portfolio is so that it can trace the pattern. The problem is that an AI’s knowledge is based on past data and it cannot account for the randomness that sends some stocks soaring and others into the dirt.

Take the example of Elon Musk appearing on a podcast and smoking cannabis, he said. The appearance and widely circulated memes of Musk taking a toke led to a six per cent drop for Tesla Inc. An AI system may have picked up on Musk’s behaviour prior to the podcast appearance, such as his feud with the SEC, and make a sell suggestion but “on the other hand, Musk acted radically when he started Tesla,” Sherman said.

Instead of focusing on building portfolios, the Toronto-based IMC Business Architecture is working on AI that would help portfolio managers better select their clients. Before accepting a client, the behavioural AI Sherman and his team have developed would be able to collect language samples from people and put them into clusters of investors who are like-minded.

The AI could then assign those groups of people based on their investment risk, their social goals and personality to the portfolio manager that best suits them. Even a subtle improvement with taking on the right clients could lead to substantial profits, he said.

Like IMC, leading Canadian firm Element AI sees the machines and humans working together and has incorporated that belief into its developmental process, according to chief science officer and co-founder Nicolas Chapados.

Chapados’ team has been focused on perfecting what they call the Trade Flow Scheduler, which is designed to help institutional investors such as pension funds rebalance their portfolios. In order to do so, these investors may be forced to execute larger orders in a market without the needed liquidity. Chapados said Trade Flow Scheduler can analyze market conditions and make recommendations on how many days or weeks the trade should be made in as well as making suggestions on inflows and outflows in that period that would have the least impact on the market.

Asked if Element would one day go further and attempt to build an AI that could replace a portfolio manager, Chapados said he wouldn’t comment on future projects.

“Our goal is to not fully replace human beings but to provide a second opinion, if you will, and to augment the human in the role,” Chapados said.

Source: https://business.financialpost.com/investing/artificial-intelligence-can-now-pick-stocks-and-build-portfolios-are-human-managers-about-to-be-replaced

Why B2B brands need to invest in brand marketing

Creativity and storytelling were previously seen as a luxury afforded to B2C brands but B2B marketers are waking up to the effectiveness opportunity investment can bring.

Businesspeople do not park their emotions and personality in a cardboard box when they come to work and buy products and services.

In fact, the way people interact with B2B brands is incredibly similar to how they engage with B2C brands. This means creativity, storytelling and long-term brand building are just as important as a product’s features and price.

The cardboard box reference comes from marketing consultant Peter Field who, along with Les Binet, head of effectiveness at adam&eveDDB, was commissioned by LinkedIn to assess the importance of brand building in the B2B sector. Binet and Field are well known for their work in the B2C space and their 2013 book ‘The Long and The Short of It’.

“There are huge similarities between B2B and B2C when it comes to brand but many B2B marketers need to revise their approach,” says Field. “Brand advertising really does work in B2B to drive buyer choices and revenues.

“Brands need a creative storytelling element because it is not enough to rely solely on rational product messaging. There has to be clear differentiation and a narrative that taps into business buyers’ emotions. Humanity must not be lost in a tech-obsessed world.”

The Binet and Field research was unveiled recently in New York and reveals that brand building in B2B should, on average, account for 46% of marketing spend and lead generation 54%. Many B2B brands spend considerably less than this proportion on brand building but the research concludes that investment should rise as a business matures and grows.

This follows research from Marketing Week and The Marketing Practice that showed that B2B brands that identified as outperforming their competition over the last two years were twice as likely to allocate 60% or more of their budget to achieving long-term marketing goals.

The hybrid advantage

The research also cites case studies from the IPA’s awards databank including BT and VW Commercial Vehicles. BT demonstrates a clear story around helping business customers in an emotional way by bringing people together, while VW Commercial Vehicles talks about being there for small business owners who can find running their business a lonely experience.

“Quite a few businesses have B2B and B2C divisions,” says Field. “These ‘hybrid’ companies seem to have applied their B2C learning to B2B with good effect.”

Another company to tick the hybrid box is insurer Direct Line. Head of transformation Claire Sadler says the Binet and Field research confirms what she has always felt, that reach and tapping into emotion through creativity and storytelling are as important to B2B brands as they have always been in the B2C arena.

“B2B advertising is often rational rather than emotional but in insurance the risk to a business owner can be greater than to someone personally,” says Sadler. “We are all human beings and we do not become a different person when we go to work.”

Technology has made buying business services easier but it has also meant that in many cases human interaction has been lost. “The salesman use to be the face of the insurance brand. Today, insurers have to tell their brand story through other touchpoints, including their website and B2B advertising,” she adds.

Short-term pressures

For purely B2B companies, long-term brand thinking can be a challenge because of the pressure to deliver short-term sales. But Field believes there is no better tool for driving growth than brand building, and marketers’ acquisition strategy must target a broad audience to generate long-term support. He says too much B2B marketing is narrow and focusing on targeting existing customers.

The findings of the research have gone down well with B2B marketers, who accept that storytelling and brand building are essential if a business is to grow and remain competitive.

The chair of The DMA’s B2B Council, Richard Robinson, is also chief commercial officer at data technology startup DPL. He says building long-term brand awareness is more integral to B2B companies than most marketers realise because growing sales depends on successfully building relationships and customer loyalty.

He believes B2B customers are often more emotionally engaged than B2C shoppers because the purchasing costs can be higher and there can be a serious financial impact if the wrong buying decision is taken.

“B2B companies will reach more customers and encourage them to keep coming back if they build brand awareness as well as trust,” he says. “B2B brands are beginning to spend a larger proportion of their marketing budgets and resources on building relationships. You can barely enter a B2B marketing event today that doesn’t cover account-based marketing and/or storytelling.”

Robinson says a long-term approach is important because the B2B buying process is counted in months or even years. “How many B2C marketers have to engage with a dozen or more decision makers, all with different needs and requirements, across multiple months, using different channels to consume information just to sell one product?” he questions.

One area that does need to change is that B2B marketers need to become more confident about sharing their stories and differentiating themselves.

Tim Matthews is CMO at cyber security vendor Exabeam and author of the book The Professional Marketer. He has built many B2B marketing teams over the years, including leading nine worldwide product launches at security products brand Symantec.

“People buy from people so it is crucial any B2B brand can find a narrative,” he says. “If there is an origin story around the founder then future buyers will connect with that and the brand.”

Exabeam itself was founded by Nir Polak after he received a security alert regarding one of his credit cards. “Stories will hook clients in because the marketing becomes more about the people behind the business rather than being too product focused,” claims Matthews.

He says the Exabeam product is about security but the marketing messaging focuses on the human element. “When there is a problem the IT team have to work overtime and weekends, which means they are not spending so much time with their family and friends.”

The lost opportunity

Colin Lewis, CMO at travel retailing platform OpenJaw Technologies, says that historically B2B marketing was seen as the ugly child internally. These were the guys who organised the client golf days and product photo shoots.

“The internet has changed this because it is clearly visible how leads are being generated,” he says. “Big B2B brands such as IBM, Microsoft or Intel have always needed a proper and evolving brand story because they operate in such a dynamic market, but for other companies the challenge can be getting the sales function to buy into the importance of long-term brand building.”

Lewis is proud of OpenJaw Technologies’ own brand story: “We were set up by three entrepreneurs and are now a 400-strong company with high-profile clients such as British Airways and Cathay Pacific. Telling your story and not just talking about product boosts your credibility and can change the perception buyers might have of your business.

“This is also important when we talk about improving the employer brand and attracting talent.”

Communications agency FleishmanHillard Fishburn has carried out its own research into how brand affects B2B marketing and sales. Its study reveals that 32% of people rank brand reputation as the most influential attribute they look for in a supplier. This was second behind value for money (57%). Buyers also want to work with brands that have built up a reputation as industry experts and storytelling thought leaders.

Claudia Bate, head of technology at FleishmanHillard Fishburn, says the C-suite is beginning to pay closer attention to how branding can help businesses stand out in a crowded market where the buying process if long and complex.

“Modern B2B marketing needs to appeal to both hearts and minds,” she says. “The decision-makers that matter do not leave their emotions and personalities at the door when they go to work. Creative storytelling, quality content and a distinctive brand identity are hugely important tools for breaking through the noise to drive real business value.”

Source: https://www.marketingweek.com/2019/06/05/b2b-brands-invest-brand-marketing/