Playbooks

Playbooks have become a recurring theme in my life recently.  Thinking about the marketing plan, it can really be considered a playbook.  You evaluate your team’s own strengths and weaknesses, then potential threats or opportunities based on opponents’ (competitors’) strengths and weaknesses and other conditions, develop a strategy and implementation plan.  Entergy’s Chief Nuclear Officer, Jeff Forbes, chose to present this year’s business plan in the form of a playbook.
 

 

I was born in Philly and grew up in South Jersey; specifically Collingswood, just outside of Camden, across the river from Philly.  Unfortunately for me, I grew up an Eagles fan.  Speaking of Eagles fans and playbooks, did everyone get to see “Silver Linings Playbook”?  Better yet, has anyone read the book?  Although Jennifer Lawrence was incredible in the movie, I liked the book better.  Although it is fiction, the author, Matthew Quick, used real places in the book, mostly in my hometown of Collingswood and the surrounding area including Westmont and Haddon Township.  The reason he used that area is because he is a fellow graduate of my Alma Mater, Collingswood High School.  In fact, he graduated with my sister, who is many years younger than I am.  The diner scene is specified in the book as being the Crystal Lake Diner, where my wife and I take my mother for breakfast almost every trip we make back home.  Matthew refers to himself as “Q” – one, because of his last name and, two, same hairstyle as our CNO (he has a sense of humor about it). 

 

   

 

My father passed away in 2001.  He was a huge football fan.  One of the last and best memories I have of my father was him having a conversation in his hospital bed with my cousin, Jimmy.  Jimmy, who lives in Maryland, is a Baltimore Ravens season ticket holder and had just gotten back from the first Raven’s Super Bowl win.  My father asked him how much he paid for the ticket, Jimmy told him, then my father told him what an idiot he thought he was, but with more colorful language.  This past Super Bowl Sunday I was rummaging around my house and I came across another playbook.  My father was assistant coach for my midget football team, the Westmont Tigers.  I had kept his playbook. 

   

I started looking through the playbook remembering some of my old teammates.  Tommy Madden was our quarterback.  I was in the backfield and a bunch of friends that I later went to school with were on the team.  A couple of weeks into the season, a new kid, Steve, kind of replaced in the backfield (I was moved to end).  He also played defensive back.  We weren’t a very good team, but Steve turned out to be our star running back.  He later starred in baseball and also played football for the University of Pennsylvania.  Anyway, Steve ended up marrying Tommy Madden’s older sister, Karen.  They settled in another neighboring South Jersey town, Audobon, and had six children; four boys and two girls.  One of their boys went on to play quarterback for Audobon and then for another of my Alma Maters, the University of Delaware.  I was thinking that my father would have really enjoyed watching the Super Bowl this year with me.  My cousin Jimmy was at the game, again, this year, but this time with his wife, Joyce. 

Steve and Karen and most, if not all, of their children were there, too.  In fact, one of their sons played in the game and was later named Super Bowl MVP. 

  

A lot of success is coming from our little area of South Jersey.

Another playbook may soon become a big part of my life – Entergy’s Continuous Improvement (ECI) Playbook.  I interviewed for the Manager of ECI for Vermont Yankee and Pilgrim in February and I’ve been told that I am in the final stages of the HR process, but the position has since been put on HOLD.  Entergy has enjoyed a lot of success as a result of our ECI program, including the 2007 NEI (Nuclear Energy Institute) Top Industry Practice Award. 

http://www.nei.org/newsandevents/News-Releases/employeesofentergynuclearearntopindustrypracticeaw

The reason I want this job is that I see an opportunity to make the program better.  Currently, every employee is required to participate in two ECI’s per year.  Each ECI gets points depending on what type or size of improvement is made.  For instance, safety, standardization and quality related improvements will get you 4 points, customer experience improvements get 2 points and cost savings, both person-hours and dollars, improvements range from 1 (<$1,000) to 8 points (≥$100,000).  The goal is for each single unit site to earn 950 points, with a stretch goal of 1050.  ECI points account for 15% of the yearly plant incentive awards.  Both Vermont Yankee and Pilgrim have exceeded the stretch goal for the past several years.  While the ECI numbers indicate a lot of improvement the past couple of years, it isn’t really translating into improved outage or even operating performance or industry ratings.  Local optimization everywhere does not create global optimization.  Mark Graham Brown, the author of “Baldrige Award Winning Quality - 17th Edition - How to Interpret the Baldrige Criteria for Performance Excellence”, is even more critical.  “Companies that tell every employee to go off and improve their processes frequently find that this leads to chaos, and the improvements in one area cause problems in others.”  I tend to agree.  We’ve seen ECI points awarded which restored processes back to the way they were before other ECI points were awarded to change that process.  We’ve also seen ECI points awarded for changes which completely bypassed other procedural requirements.  Knowing this, it appears our metrics aren’t really providing much useful information.  This has been acknowledged by upper management since there is now a charter team working on performance indicator improvements.  The numbers are astounding.  They’ve already identified 128 gaps between our indicators and NRC and INPO indicators; then they plan on looking at an additional 700 non-regulatory and non-industry indicators.  Of course, these are obviously not just marketing indicators, but I wonder how it got to be such a high number.  Mark Graham Brown has also written a number of books on metrics and balanced scorecards, which I plan on reading in my spare time.

I already had most of this written when we got the instructions for the final post.  The second sentence of this post was “Thinking about the marketing plan, it can really be considered a playbook.”  Drucker says that the purpose of any business is to create a customer and that every business has two basic functions; marketing and innovation.  I think that there is for room for innovation in marketing, but the basics of marketing remain the same 4P’s; product, price, promotion and place.  Drucker says that customers define quality, so it is a good thing that quality improvements efforts have moved towards the customer focus rather than just process improvements.  Drucker felt that the most important questions that you should ask about your organization are 1) What is our Mission, 2) Who is our customer, 3) What does our customer value, 4) What are our results, and 5) What is our plan?  This, of course, should be in our playbook or marketing plan.  Implementing Drucker’s Marketing View involves four major instructions; 1) Market marketing to all internal organizations at all levels (cross-functional view), 2) Understand the difference between sales and marketing (sales can be detrimental if you are coercing rather than informing customers), 3) Educate and lead, and 4) Approach the business from the customer’s point of view.  These seem to be good instructions to take into any leadership position.  Hopefully, I’ll have my leadership position soon – or is that showing professionalism, which Drucker doesn’t really like?  I guess it depends.     

Now it is over – one more class for MBA, but for the time being, a little Alice Cooper SCHOOL'S OUT FOR SUMMER…

http://youtu.be/XbNEOJMGFAo

 

 

 

Forecast – Event – Response – Reforecast

To quote PracticalForecasting.com, “Forecasts are a critical part of business planning, management, and strategy -- but they're always wrong.” I think it depends (where have I heard those words before) on your assumptions and desired or expected level of accuracy.  I was deeply saddened this week when Southern California Edison (SCE) announced that they would be permanently closing their San Onofre Units.  For those who don’t know about it, here is a link to some information about the shutdown and problem.

 

 http://ansnuclearcafe.org/2013/06/07/songsretiredecommission/

 

I had interviewed for an Engineering Fix It Now (EFIN) Supervisor position at San Onofre about a week before they initially shutdown because of the leaks in their almost new steam generators that were manufactured by Mitsubishi.  Although there will be some jobs remaining at their site for decommissioning, I was kind of surprised at the number of employees that they had there when I interviewed, about 2700.  I guess I’ve gotten used to our small Vermont Yankee staff of 600.  Of course, when they were operating at full uprated power, they were producing approximately 2150 Megawatts compared to 620 for Vermont Yankee.  Now, that carbon-free capacity is gone forever because of unnecessary regulatory uncertainty.  How many windmills or solar panels does it take to replace 2150 Megawatts of carbon free power or even the 70% of one unit’s capacity, which they planned to produce without much regulatory interference and is still greater than the output of our little VY plant?  Either we’ll find out or it will be replaced by more natural gas, which still emits carbon, or coal plants, which kill more people per megawatt hour than any other power source available. I’m guessing the later, since wind and solar require “farms” to produce any appreciable capacity.  Unfortunately, the NRC decided they needed to rethink their own previous decision to allow them to operate and it would take them more than a year to decide.  I’m not blaming SCE for their decision.  They face that certain uncertainty (our regulatory inadequacy) that requires them to make the difficult decision to abandon a product. 

 

This week’s prompts included “what is the most important thing you learned during the simulation?”  I think it’s that you have to balance how much effort you put into data gathering, the situation analysis and the marketing plan.  Outside situations, which may or may not already be happening, can change your plans for you.  I originally didn’t really consider the allergy medication to be a viable product because I thought the market to be too small. I didn’t realize that it would be the first non-drowsy allergy relief medication on the market.  Even though the first to market doesn’t always lead the market, I saw this as an opportunity to capitalize on our already good brand name to expand our mission into the allergy relief market.  It is still an expensive product to produce and I don’t really know why, but it is currently profitable enough to continue and shows promise since most customers feel we are priced too low.  Our team is focused on market leadership rather than profitability or sales revenue.  Those will follow once we have established market leadership, but we are more concerned about providing the most relief for our customers.

 

Although we didn’t specify it in our marketing plan, we did consider the competitive advantage versus market attractiveness matrix.  We gained competitive advantage with the combination of Allround and Allround+ in the cold market, which also extended into the cough and allergy markets.  The cold relief market continued to expand and we saw the opportunity to reach children and others concerned with the alcohol and cough suppressants present in our original formula, which we did not want to abandon because of brand loyalty and market leadership.  We knew that the new formula would cannibalize some of the existing product, but felt it would increase our overall market share in the cold relief market.  As the allergy market consistently increased, we recognized the market attractiveness potential for a non-drowsy formula, even though it was not specifically stated (but forecast) in our original marketing plan.  The market attractiveness of both the cold and allergy relief markets increased as those were the two markets that were showing consistent growth above population growth.

 

The incidents have been interesting, since we didn’t have any in the practice runs.  For the Social Media incident in the first period we chose “Website with interactive blog and use up to 5% of the advertising budget toward Google Adwords to generate additional awareness and direct people to the website.”  We felt it wasn’t enough just to create a website, which, because Allround.com was not available, we used Allstar.com.  We also didn’t feel Facebook or Twitter could really promote our product(s) like a website would.  The second special decision was the Quality Assurance incident and we disposed of the soon to expire product rather than messing with our distributors.  The next special decision was the cannibalization incident.  We felt the children’s formula would cannibalize our original formula more than it actually did but also felt it wouldn’t be as bad as the cannibalization from a 12-hour capsule.  We didn’t think the cough formula market attractiveness was there compared to the children’s formula which, at the time, had only one other specific competitor.  The Social Media Problem was next and we chose to check the page often and respond to comments rather than ignore or delete them, shut the page down or get legal involved.  For the Detailing Changes Incident, we chose to add e-detailing to our website in hopes of improving recommendations from doctors and pharmacists.  For the Creative Marketing incident we chose to run an ad contest to have customers come up with a clever ad to run on the web in order to get customers involved and gain some insight from them.  For the Price Discrimination Incident, we chose not to extend the additional discount to the large chain store, thinking that would upset our other distribution outlets if we gave special treatment to one.  We probably lost some sales for a short period but, being the market leader using a pull strategy, customers will likely get them to sell our product again.  We’re still working on the Product Tampering Incident.

Metric system? It depends!

The title is kind of an inside joke with me because I remember being in high school (a long, long time ago) and being told that we (the US) would be converting to the metric system in the not too distant future.  Here we are thirty-something years later and we still see inches, feet, miles, etc.  Of course, we’re talking about a different metric system in marketing, but I find it amusing.  I also find amusing Prof. Spotts continuous use of “It depends!”  One of my favorite quotes from my undergraduate mentor and thesis advisor, Dr. Norman Collins, Jr., was that you could answer almost any question with “it depends,” but then you had to dig for and find the required information or make assumptions to correctly and completely answer the question.  Although my undergraduate degree (’95) is in Engineering Technology, it wasn’t offered by the College of Engineering at the University of Delaware.  It was actually through the College of Agricultural Sciences (now called the College of Agriculture and Natural Resources).  The first time I met Dr. Collins, I thought he was a janitor because of the way he was dressed.  Ah, assumptions!  I regret not keeping in touch with him because he passed in 2007 and I do consider him one of the top three teachers/professors in my life.

So what metrics have we chosen?  Since I am on the team that was available for the live class, we got to choose.  Looking at the results, our choice did not give us any advantages based on the results so far.  In fact, I’m pretty sure one metric had our team ranked last in the class.  Our challenge is gaining ground based on the actions we defined in our marketing plan.  Maybe our choice of metrics was based on what we already knew we were lacking.  Choosing metrics which accentuate what you are good at can be a recipe for disaster.  There is also the trap of “tell me how you will measure me and I’ll tell you how I’ll perform.”  This can also be a recipe for disaster, as managers manipulate real performance around performance indicators.  The metrics chosen should be objective enough so as not to allow manipulation, but should also show you that you are moving toward your goals and mission. 

 
We are supposed to also comment on three other classmate’s blogs, different from our choices last week and not our teammates.  That doesn’t leave a lot to choose from in a class this size, but… So far, Mindy is the only available classmate who has posted a blog this week (and I know I am one of the worst offenders at posting as late as possible).  She provides a good analysis of why teamwork can be important, the diversity of opinions that need to be considered.  Conflict without confrontation can be extremely helpful in a team setting.  Equally, groupthink can be disastrous.  I also haven’t commented on Abhishek’s blog, yet, even though I have enjoyed reading several of his posts.  He maintains structured and organized responses to prompts and providing the required information and/or assumptions made when providing his answers.  I’ve been holding off commenting on Justin’s blog, even though I do like the way he ties College Football into every post with relevance to the course work presented.  I’m hoping to add a little football theme (specifically, playbooks) to my last blog post for this class.

My experience, so far, with PharmaSim has been interesting, but, after listening to Daniel Kahneman’s “Thinking, Fast and Slow,” I’m wondering how much the simulation is based on real probabilities or what the creators’ opinions are.  My concern here is actually based on a concern that we ran into with our simulator at Vermont Yankee.  The simulator was showing almost full DC voltage (125VDC) on our batteries after a simulated loss of AC power for more than two hours.  My calculations show that DC voltage would be about 110VDC, based on the assumed loads on the batteries.  This gives the false impression that nothing needed to be done to restore AC power to our battery chargers.  Fukushima has shown us otherwise and this anomaly was pointed out by the NRC to us two years prior to the Fukushima incident.  So, needless to say, I’m kind of sensitive to simulations which are not based on complete, or even assumed, reality.  I pointed out my concerns about the “automatic” expansion of operations when capacity utilization reached 110%, which is already an impossible accomplishment in the nuclear power industry.  100% is 100%.  There is no more without a major investment in a new plant or power uprate.  PharmaSim assumes you can sell more than you can produce, which is a common complaint about "marketing" people from "engineering" and "production" people.