Tag Archives: business strategy

Auftragstaktik and The Lack of Leadership in Advertising Industry

“No plan survives contact with enemy”
– Helmut von Moltke
 
I have met great people, personalities and borderline geniuses during my years in advertising. What have I encountered less is good leaders and visionary leadership.

The biggest problem in advertising industry is leadership problem. Majority of us (me included) have been promoted because we are great experts. We are good strategists, writers or suits but majority don´t have any experience or natural skills to lead or inspire teams. I would argue also that the major reason for churn in ad agencies is due to bad management and lack vision and strategic vigor. When you don´t have the vision you end up doing things yourself or micro-managing your team which naturally annoys any sensible person.

Because majority of leaders are former experts, only few can do the leap to strategic level from tactical grunt work. Contrary to the stereotypes, the right leadership approach to creative industries can be found from military strategy and of all places in usually rigid and authoritarian Germany. “Auftragstaktik” or Mission command in US, is a mission-type tactics doctrine, which promotes freedom and speed of action within defined constraints. The idea of Auftragstaktik originates with Frederick the Great, who was frustrated by the lack of initiative within his leaders. Military strategist Helmut von Moltke coined the actual idea hundred years later (whose quote above is one of the best articulations of strategy). Currently similar types of command are advocated in US, Canadian, Dutch and British armies. The basic idea of Augftagstaktik is simple:

  1. Leaders give the team clearly defined goal
  2. Leader gives the team specific timeframe to accomplish that goal
  3. Leader lets them accomplish that goal independently

Essentially in Auftragstik you say your team what you want them to achieve but you are not saying how they can achieve that. This should result to two benefits:

  1. The team has the ownership and pride of the particular project. They will become better at solving problems and you also cultivate future leaders. They are closer to the project/actual fight so they should do their decisions where things are actually happening.
  2. The leader frees his/her time from tactics and keeps focused on the broader strategy. The leader should have better visibility of business/the war so he/she should be able to show guidance and vision to the team.

If you cannot give responsibility to your team and don´t trust them, you have either made bad hires or you are control freak. Both things are naturally highly worrying. If your leadership is diluted to micro managing you do more harm than good in your company. Then your choices are either to evolve from manager to true leader by trusting your team or you just have to face the reality that you are not cut as a leader at the first place.

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What´s App Facebook? 4 Questions You Need to Ask to Understand The Acquisition of WhatsApp

Facebook´s acquisition of WhatsApp for about 19 billion (!) is the biggest deal ever for venture-capital-backed startup. As far as the money goes, it is naturally mind-boggling amount of cash but strategically I am trying to get my head around this. Four big questions came to my mind, when analyzing the acquisition:

1. What kind of ecosystem Facebook is building?
Currently Facebook is owner of three really strong (and separate) digital platforms: Facebook, Instagram and WhatsApp. Despite launching the ad units in Instagram, the photo platform has been relatively autonomous regarding Facebook. Apparently they will continue similar approach with WhatsApp and even more so as there will be no ads (in foreseeable future) in WhatsApp. See more in question 2 on that matter.
If we compare to Google, who builds their entire product offering under strong Google branding and synergies, Facebook currently resembles more of a venture capitalist and having quite separate and independent entities. Either approach is right or wrong, but at least currently Facebook ecosystem seems quite disjointed compared to the Google one. But maybe they have a bigger plan intact: see question 4.

2. How will Facebook monetize WhatsApp?
On the investor call Facebook mentioned that there would be no ads on WhatsApp and they are mainly concentrating on growth in the near future. Currently WhatsApp is free for one year and then you pay 0.99 for every additional year (and not even in all the markets).  Current business model is not exactly breaking the bank as it has quite limited growth opportunities, but compared to many other social ventures coming from Silicon Valley it is already profitable. From monetization standpoint it is interesting opportunity for Facebook to enter also to the subscription business and test it first with WhatsApp before rolling it to wider.

3. Was it strategically right decision?
Initially buying WhatsApp seemed a rather uninspiring and unsurprising act. More forward-looking would have been buying some emerging mobile instant messaging platform from Asia (Line, KakaoTalk, etc.). Especially as Facebook mentioned that the reach in emerging markets was one of the core reasons for acquiring WhatsApp. Asian mobile instant messaging platforms would have been better fit also to current Facebook monetization strategy as these platforms are currently more open to advertising as well? Cynical view of the strategic importance of the buy was that as the main Facebook platform loses steam the growth and engagement had to be bought to please the investors.

4.  Will there be Facebook Premium in the future?
How much would you pay for your Facebook account?
It might be that the goal of buying Instagram and WhatsApp is eventually to have capabilities to introduce Facebook Premium. This social network would add the best of the Facebook ecosystem and provide value on certain subscription fee. I have been toying around with that idea for a while, but currently it seems more reality than ever before. I have been quite disappointed of the unimaginative monetization strategies Facebook has had (overtly media-focused) and venturing to subscription models without endangering the crown jewel of free Facebook seems lucrative and interesting option.

The reaction from the markets to the acquisition was slightly disappointed and Facebook stock plunged slightly.

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