Is your company culture setup to effectively support your business goals? Assuring the scalability and sustainability to your business strategy is the foundation to a winning plan. "A Leadership Imperative for Growth: Aligning Brand & Culture to Strategy" This presentation, by Steve Patti of StevePattiCMO, and Ryan Rieches of BrandingBusiness (formerly RiechesBaird), was delivered at SoCal BMA’s 2nd Annual Regional Conference: The Integrated Leadership Summit, held January 21, 2015, in Long Beach, CA. The event, organized and hosted by Business Marketing Association, Southern California Chapter, was part of the third annual BMA Global B2B Regional Conference Series, and SoCal Chapter’s ‘The Leading Edge' executive signature series. http://www.SoCalBMA.org/Events

1. A Leadership
Imperative
for Growth
ALIGNING BRAND, CULTURE
AND STRATEGY
#socalbma Ÿ @socalbma
Steve Patti CMO.!

2. WHAT IS LEADERSHIP?
DIVERSE RANGE OF DEFINITIONS
“Leadership is the capacity to translate vision into reality.”
- Warren Bennis
“As we look ahead into the next century, leaders will be those who
empower others.”
- Bill Gates
“Leadership is influence – nothing more, nothing less.”
- John Maxwell
“The only definition of a leader is someone who has followers.”
- Peter Drucker
#socalbma Ÿ

3. WHAT LEADERSHIP SKILLS DO YOU NEED MOST?
DIVERSE RANGE OF OPINIONS
HBR.ORG
#socalbma Ÿ

4. ¡ Control resources
§ Human (employees, contractors, etc.)
§ Financial (budget)
§ Physical (plant, equipment, etc.)
¡ Direct actions of others
§ Rank authority
§ Social influence
¡ Deliver results to meet business objectives
§ Strategy
§ Execution
WHAT DO LEADERS DO?
GENERAL ROLE EXPECTATIONS
#socalbma Ÿ

5. ¡ Elements of an Annual Plan
§ Executive summary
§ Mission statement
§ Business description
§ Business environment analysis
§ SWOT analysis
§ Industry background
§ Competitor analysis
§ Market analysis
§ Marketing plan
§ Operations plan
§ Financial plan
LEADERS CREATE STRATEGY…
#socalbma Ÿ

6. ¡ Elements of an Annual Plan
§ Executive summary
§ Mission statement
§ Business description
§ Business environment analysis
§ SWOT analysis
§ Industry background
§ Competitor analysis
§ Market analysis
§ Cultural analysis
§ Brand management plan
§ Marketing plan
§ Operations plan
§ Financial plan
...BUT IS IT ENOUGH?
#socalbma Ÿ

7. GREAT LEADERS MAKE THE CONNECTION:
BRAND > CULTURE > STRATEGYBrand
Benefits:
Staff engagement
Staff commitment
Lower turnover
Access to talent
Lower labor costs
Increased ROI
Culture
Benefits:
Revenue growth
Higher stock price
Increased ROI
Stable cash flow
Lower COC
Strategy
Benefits:
Revenue goals
Business goals
Professional goals
Winning with customers requires not only the right narrative but
the ability to consistently deliver against expectations.
#socalbma Ÿ

8. ¡ Sales (lack of meaningful positioning)
§ “Last look” RFP price concessions
§ Executive “heavy closing” road shows
¡ Customer service (lack of consistent execution)
§ Financial adjustments to “make things right”
¡ Operations (lack of consistent execution)
§ End-of-quarter “all hands on deck”
§ Late hours
SIGNS OF GETTING IT WRONG:
HEROICS DON’T SCALE
#socalbma Ÿ

9. Why Align
Culture to
Strategy?
THE
BUSINESS
CASE
#socalbma Ÿ

10. Approximately 46% of EBIT is
explained by the variable of
corporate culture (“buy in”)
IMPACT OF CULTURAL ALIGNMENT:
FINANCIAL PERFORMANCE
Source: Corporate Culture and the Bottom Line, Eric Flamholz, University of California at Los Angeles, 2001
(published in European Management Journal, vol 19, number 3)
#socalbma Ÿ

11. ¡ Firms with strong cultures outperform those
with weak cultures
REASON #1:
IMPROVED FINANCIAL PERFORMANCE
Source: Corporate Culture and Performance, Kotter and Heskett, 1992
Average Increase for 12
Firms with Performance
Enhancing Cultures
Average Increase for 20
Firms without Performance
Enhancing Cultures
Revenue Growth 682% 166%
Employment Growth 282% 36%
Stock Price Growth 901% 74%
Net Income Growth 756% 1%
#socalbma Ÿ

12. ¡ Markets like steady, predictable performance
¡ Firms with highly variable cash flows find
themselves at a competitive disadvantage:
§ Inability to internally finance discretionary investments.
§ Higher cost of external capital
¡ Firms with highly variable cash flows have:
§ Lower levels of CapEx investment
§ Lower analyst following
§ Lower S&P bond ratings
§ Higher weighted cost of capital
REASON #2:
RELIABILITY OF FIRM PERFORMANCE
Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson,
Massachusetts Institute of Technology, December 2001
#socalbma Ÿ

13. ¡ Since strong corporate culture enhances goal
alignment (employees less uncertain about the
proper course of action in unstructured
situations)
¡ Strong culture enhances employee motivation
and performance (if employees lack a clear
understanding of the organization’s goals,
coordination is more difficult)
¡ Firms that execute well may actually
compensate for suboptimal strategies
REASON #3:
EXECUTION OF STRATEGY
Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson, Massachusetts Institute of Technology, December 2001
#socalbma Ÿ

14. ¡ If employees differ in their understanding of
the environment, they will either:
§ Spend more time debating alternatives
§ Behave inconsistently and therefore be more likely to
carry out routine tasks poorly
¡ Strong cultures socialize new members more
quickly
REASON #3: (CONT.)
EXECUTION OF STRATEGY
Source: The Strength of Corporate Culture and Reliability of Firm Performance, Jesper Sorenson,
Massachusetts Institute of Technology, December 2001
#socalbma Ÿ

15. ¡ Millennials want
meaning from their
careers
§ Culture trumps
compensation; reverse of
Boomers/Gen Y
¡ Culture determines:
§ Recruiting top talent
§ Retaining top talent
§ Delivering superior
financial performance
CHANGING WORKFORCE COMPOSITION:
ARE YOU READY FOR THE SHIFT?
#socalbma Ÿ

16. ¡ Fortune 500 Telco
§ Goals: move down-market (SMB), sell new product, grow MRR
§ Culture: slow to act, inflexible, lack of personalized services
¡ Niche enterprise software developer
§ Goals: move up-market (Fortune 500), CIO engagements
§ Culture: hip/cool, Millennial staff, 40-hour week, C-suite heroics
¡ Mid-market financial institution
§ Goals: move up-market (HHI), trusted advisor, increase CLTV
§ Culture: risk averse, “employment for life”, anti-sales, slow to adopt
¡ Mid-market hosting/cloud infrastructure provider
§ Goals: move up-market, cross-sell portfolio to grow MRR
§ Culture: 3 brands operating as cultural tribes, silo delivery despite
customers buying across portfolio
EXAMPLES OF CORPORATE MISALIGNMENT:
“STRATEGY ONLY” FOCUS
#socalbma Ÿ

17. Brand +
Culture +
Strategy
GREAT LEADERS ACT
#socalbma Ÿ

18. ¡ Q1: Do we have a defined
culture and can my
employees articulate it?
¡ Q2: Are we living the
culture?
¡ Q3: Is our culture helping
or hurting our ability to
deliver against business
goals?
SELF-ASSESSMENT
#socalbma Ÿ

19. “Culture eats strategy for breakfast.”
- Peter Drucker
WHAT GREAT LEADERS UNDERSTAND:
CULTURE ENABLES STRATEGY
Culture Strategy
#socalbma Ÿ

20. “Culture eats strategy for breakfast.”
- Peter Drucker
WHAT GREAT LEADERS UNDERSTAND:
CULTURE ENABLES STRATEGY
Culture Strategy
#socalbma Ÿ

21. WHAT GREAT LEADERS UNDERSTAND:
BRAND STRATEGY SHAPES CULTURE
• Positioning => Strategy
• Purpose + Vision + Mission + Values => Culture
PURPOSE
VISION
MISSION
VALUES
POSITIONING
VISION: What we aim to achieve
POSITIONING: How we differentiate from our competition
PURPOSE: Why we exist
MISSION: How we plan to achieve our vision
VALUES: What we stand for and how we behave
#socalbma Ÿ

22. WHAT GREAT LEADERS DO:
PURPOSE + POSITIONING = RESULTS
Brands that center their business on ideals had a growth
rate that is more than triple their
competitors.
Investments in these companies between 2001-2011 would
have yielded a 382% greater return than the S&P
500.
Source: Millward Brown and Jim Stengel study, 2012
#socalbma Ÿ

23. ¡ Benefits of Employment Value Propositions as
part of culture and internal branding:
§ Employee engagement: 55% vs. 36%
§ Talent acquisition: 60% vs. 40% of labor market
§ Turnover rate: 10% vs. 16%
§ Compensation: 26% (lower) cost advantage
§ Commitment: 38% vs. 9% “high” commitment levels
WHAT GREAT LEADERS DO:
ENROLL EMPLOYEES IN THE BRAND
Source: Is There a Strong Correlation for Companies with a Strong Employment Brand Between Employee
Engagement Levels and Bottom Line Results? Park and Zhou, Cornell University, Spring 2013
#socalbma Ÿ

24. Take Stock
Take ActionWHAT SHOULD YOU DO?
#socalbma Ÿ

25. 1. Understand how brand performance impacts business
performance (employees, customers, prospects)
2. Assess the alignment of internal culture
3. Monitor brand performance across the buyer journey: new
buyers + existing customers
§ Perception
§ Intent to purchase
4. Measure financial impact
5. Activate executives to shape culture to improve business
performance (delivery alignment to support Sales)
6. Validate or Adjust based on relevance and importance to
target audience(s)
STEPS TO ALIGN YOUR ORGANIZATION
#socalbma Ÿ

26. MEASUREMENT AND OPTIMIZATION
Tools exist to enable leaders to monitor and measure brand
correlation to financial performance.
Benchmark
Current Brand
Performance
#socalbma Ÿ

27. MEASUREMENT AND OPTIMIZATION
Tools exist to enable leaders to monitor and measure brand
correlation to financial performance.
Identify Unseen
Opportunities
for Growth
#socalbma Ÿ

28. MEASUREMENT AND OPTIMIZATION
Tools exist to enable leaders to monitor and measure brand
correlation to financial performance.
Define Data-Based
Positioning Strategy
#socalbma Ÿ

29. MEASUREMENT AND OPTIMIZATION
Tools exist to enable leaders to monitor and measure brand
correlation to financial performance.
Monitor the
Impact of New
Brand Strategy
#socalbma Ÿ

30. StevePattiCMO
Steve Patti
(210) 201-3246
stevepatticmo@gmail.com
www.stevepatticmo.com
BrandingBusiness
Ryan Rieches
(949) 273-6323
ryan@brandingbusiness.com
www.brandingbusiness.com
CONTACT US
#socalbma Ÿ