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Libey Incorporated
Economic Outlook
Secrets of the Catalog Master
Vol. MMVII No. 1
January 2007
January 2007
Cherry Hill, New Jersey
Des Moines, Iowa
Donald R.
Libey, Editor
Talent and People in Direct Marketing
by Donald R. Libey
The Importance of Talent
The watershed year was 1989. That is now 17 years ago. That was the year when the technological revolution in direct marketing—systems, databases, and software—took the lead over people, talent and experience. For nearly two decades, we have seen the results of our technological explosion, and the results have been impressive.
Suddenly, however, we are beginning to experience a severe lack of talent. As the direct marketing industry expands and channel proliferation continues to create larger portions of share, the industry is finding it difficult to find talented people.
Talent presents an interesting multi-perspective. For senior executives, talent is often described as management skills. For tactical staff, talent is often described as functional. For example, a CEO of a direct marketing company owned by a private equity group will be evaluated on the talent and ability to deliver EBITDA (earnings before income taxes, depreciation and amortization). A manager of search engine marketing will be evaluated on the talent and ability to create top search rankings and subsequent conversions, as well as the hands-on capacity to build online relationships. A VP of ecommerce will be evaluated on both web-related talent and direct marketing-related talent.
If we accept the fact that people still make things happen—at all levels—then the recruiting and retention of talent and people becomes one of the most important activities that the successful business must accomplish.
How do you find these varying levels of talent? It’s getting difficult. And now, some blunt talk about people and talent.
True Talent and Pseudo Talent
True talent is exceptionally rare. True talent is a unique blending of tomorrow’s technological and channel knowledge and historical knowledge of overall direct marketing knowledge. In other words, true talent understands how each channel must be used to enhance the overall performance of all the channels. True talent is not found in single barrels; it is found in blends of skills from numerous barrels. A cutting edge online marketer who also knows cutting edge catalog circulation is a very valuable asset to the multichannel direct marketing company.
True talent is not only exceptionally rare, but it also ‘rings true.’ By that I mean it actually knows what it is talking about. Our industry has a sufficiency of semi-talented people whose experience lies in the direct marketing of yesterday; it has a serious insufficiency of highly talented people whose knowledge lies in the direct marketing of tomorrow tempered by the understanding of the fundamental basics of direct marketing.
True talent is, by definition, short term talent. A twenty-six year old search expert, who can actually deliver, knows what that talent is worth and seeks out those companies that are willing to pay for that talent. And, when that expert’s skills grow in two or three years, another position at higher compensation will be irresistibly attractive. True talent today is opportunistic.
Pseudo talent knows enough to get by. Dilbert and Wally are the ‘everyperson’ of pseudo talent. They are looking for a fairly permanent cubicle and a good health insurance plan. They have enough knowledge and skills to do an average job, but they are not, and never will be, rainmakers. They are not
apprentices, but they are not masters; they are journeypeople.
The talent pool, therefore, cleaves into two halves: 1) the true talent that is opportunistic and mobile; and 2) the pseudo talent that is looking for security and willing to take less compensation. Competition for true talent is fierce and large companies tend to be successful in attracting true talent, even if only for a relatively short tenure. Supply of pseudo talent is greater than true talent, and it is cheaper. However, you still only get what you pay for talent.
Ownership Motivation
Why do some companies have an abundance of true talent and others an abundance of pseudo talent? Many reasons can be suggested, but my experience tells me the primary reason is the motivation of the owner(s). That motivation tends to fall into two categories: 1) owners who invest their companies with true talent; and 2) owners who indenture pseudo talent. It comes down to money. Successful companies spend money on true talent and grow rapidly. Mediocre companies spend little and get little as a result.
The differentiating attitude among both types of owners also tends to fall into two distinct categories. The successful owner with true talent believes it is the people who drive the success of the business. The mediocre owner believes it is he or she who drives the success of the business. Successful companies focus outward on the talent and abilities of people. Mediocre companies focus inward on the omniscience of the owner.
Competing for the very best minds, talent, and skills in the multichannel direct marketing universe must lie at the heart of any company’s strategic planning. Nothing happens without people. Depending on the motivation of the owner, two possible outcomes exist based on the people and talent quotient of the company: 1) success; 2) mediocrity.
The Easy Way Out
When I look at the coverage of the basics of direct marketing, I see, too often, simplistic choices that reflect the easy way out of the dilemma. Circulation management is given to a raw apprentice or, worse, turned over to the anonymity of the Black Box membership co-op. When did circulation expertise—the life-blood of direct marketing—become unworthy of experienced talent? There is, however, no circulation rainmaker on staff.
Product management is more often than not a hodge-podge of poor management. Nearly every company has a twenty percent overage in inventory and way more obsolete, slow-moving product than should ever be tolerated. There is, however, no merchandising rainmaker on staff.
Analytics have four different interpretations—one for catalog marketing, one for ecommerce, one for accounting, and then the one the owner believes. There is, however, no analytic rainmaker on staff.
Operations and fulfillment are below par. Orders are double-shipped; returns are messy; inventory is out of whack; efficiencies are ‘iffy.’ There is, however, no operations rainmaker on staff.
What often is on staff are circulation, merchandising, analytic, and operations people who are ‘okay.’ They show up and do something and that is all they are being paid for.
This easy way out; this ‘lowest cost’ solution; this mediocrity-wish; this inward focus on owner omniscience, is far too prevalent in an industry as sophisticated and profitable as direct marketing. When private equity ownership takes over, the pseudo talent is put to the sword of profitability. Rainmakers arrive and the true talent drives the investment, or else. In rare cases, pseudo talent bluffs its way for a year or so, but sooner or later, the hard realities are exposed and true talent dominates.
Talent and People Must be an Intentional Decision
Owners and senior management—if they truly desire growth—must inventory the talent they have and decide—intentionally—to raise the talent level of the organization. Ownership must accept—if they truly desire growth—that there is a cost associated with that intentional strategic decision. Ownership must accept—if they truly desire growth—that there is pain associated with that intentional strategic decision. People will have to be replaced. Ownership must accept—if they truly desire growth—that the entire attitude of the company will doubtless have to change if they are to become successful in attracting and retaining truly talented people. Truly talented people are smart, and they are the first ones to see through a company’s persona. Let me give you an example. Pick a company in your field that you think is pretty mediocre. Now, let’s list the reasons a young, brilliant, experienced rainmaker in, say, database analytics would choose that company over Google. That’s exactly what you are up against when it comes to attracting talent.
The decision to build a new facility is easy. The decision to expand into a new product line is easy. The decision to spend $4 million on a new operating and ecommerce platform is easy. The decision to upgrade people and talent is nearly impossible because it is so soul-searching and requires so much pain. And yet, it is where everything else begins and ends.
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