Wednesday, July 27, 2011

Strategic Planning Analogy #404: A Word About Sponsors

Paris Hilton has tried a number of things in her career—singer, actress, and author, just to name a few. But she has also been very busy lending her name to all sorts of products.

Some of the products she has lent her name to make sense—items like apparel, shoes, fragrances, and accessories. Although with all the hundreds and hundreds of styles and versions, one wonders how much input she actually had on many of these products.

Other products with her name are a little bit further afield—items like a collection of fashion and accessories for dogs, press-on nails and eyelashes, hair extensions and the like.

Yet others are even more far afield, like Paris Hilton motorcycle helmets, video games (Paris Hilton’s Diamond Quest), champagne and wine in a can, a chain of nightclubs (Club Paris), and decorative accessories for scrapbooking. She even promoted a brand of beer in Brazil whose name roughly translates into “Very Blonde Bitch.”

Needless to say, a lot of these far afield products were major flops. I guess the name Paris Hilton has only so much power.

Paris Hilton has made a lot of money by lending her name to a wide range of products. Many of the people who paid her that sponsorship money, however, did not succeed as well from the deals. A large number of these products were failures.

Once on the David Letterman show, David was giving Paris a hard time about all of the sillier products she had lent her name to. It soon became apparent that Paris really wasn’t all that interested in many of the odd items sold under her name. You could see that she was much more interested in the promotional money she was making than the desirability of the products her name was on. I’m not even sure she had ever used many of these products. For example, Paris rarely ever made her scheduled appearances at Club Paris. She was too busy. If Paris wasn’t interested enough to visit her clubs, why should I make the time to visit them?

In the end, this made Paris Hilton a relatively poor sponsor.

In the world of strategic planning, it is also common to have a need for sponsors. Unless some high level executive lends their name as an endorsement of the strategic program, the program goes nowhere. However, if your executive sponsor just lends his/her name and really doesn’t get personally invested in the project, that sponsorship may be about as useful as Paris Hilton’s name was on some of the far afield products.

Sponsorship by itself will not ensure strategic success. You need the right sponsor who will lend the right kind of support.

The principle here has to do with executive sponsorship for strategic initiatives. You not only need a strategy for the initiative, but also a strategy for managing the sponsorship of that initiative.

There are three elements to a sponsorship strategy—choice of sponsor, choice of relationship, and incentives. Each aspect is discussed below.

Choice of Sponsor
In general, there are two rules of thumb in choosing a sponsor:

1) The higher the sponsor’s rank in the corporation, the better. In fact many feel that without the endorsement of the CEO (the highest ranking officer), the initiative will never fully get off the ground.

2) The more involved (time, emotion, action) the sponsor is in the initiative the better. You don’t just want use of the person when the initiative is introduced, like was often the case with Paris Hilton. You want their help all the way through to the end.

The problem is that, often times, the higher one reaches in the organization for a sponsor, the less time that person has to get involved in the strategic initiative. Therefore, you need to make trade-offs. The goal is to find the highest ranking person who still has enough space in their schedule (and enough desire and expertise) to devote meaningful energy to the initiative.

Getting the right sponsor is critical. And the sooner you work on getting the right one, the better. Don’t wait until the project is approved to look for a sponsor. The sponsor may be essential to getting approval in the first place.

My experience is that it is best to start seeking out sponsors before the initiative is even fully fleshed out. That way, the sponsor can help design the initiative. By participating in the early design, he or she is more emotionally vested in getting the initiative accomplished, since it is partly their idea. I’m pretty sure that Paris Hilton was brought in relatively late on many of the products she endorsed, which is why she had no emotional ties to them. Even if the desired sponsor is not part of the strategic development team, get them emotionally involved early by seeking their input.

Choice of Relationship
There are three types of relationships a sponsor can have with a strategic initiative. The least involved relationship is that of an “endorser.” An endorser essentially lends their name to the project early on and does little else.

At the other extreme is the “complete handoff.” This is where the sponsor takes over full responsibility for the project. In fact, they may even be asked to abandon their regular job in order to manage the project full-time. At the time of the handoff, the strategists are no longer involved in the project.

The third option is in the middle, which I call “co-production.” This is where the strategists and the sponsor work together manage the process.

There are many problems with the two extremes. For example, if all you get is the endorser’s name early on (the first option), then you can end up with many of the same problems that manufacturers had using Paris Hilton’s endorsement. The sponsorship is too weak to withstand all the resistance the initiative will encounter along the way. About the only time endorsement alone is desirable is when trying to get the support of the CEO (because that may be all you can get at that level). In that case, you probably need multiple sponsors—endorsement at the very top, and something stronger further down the organization.

The complete handoff is nice, because you are getting the greatest commitment of the sponsor. However, there can be a problem if the strategists are cut away from the project too early. The strategists and their team put a lot of effort into researching and thinking about the initiative. They have some unique skills in helping to see how all the pieces fit together. If they are cut out of the process too soon, a lot of their insight is also cut out.

The key concern here is that new strategic initiatives are often contrary to the status quo, yet most sponsors come out of the status quo. Therefore, if the strategists are cut out too soon, the initiative may end up becoming less radical than desired, and end up more like the status quo. After all, that is what the sponsor knows and is more comfortable with. That is why you need to keep the strategists around longer, to help pass on the insights learned and make sure that the radical essence of success is not lost over time.

This is why I prefer the middle-ground of co-production. That way, everyone has a vested interest in success and the key success factors are not lost along the way. But even if you cannot get formal co-production, informally try to help after the handoff so as to minimize problems.

To keep the initiate on a successful path, it is helpful to make sure that interests of the sponsor are in sync with the interests of the initiative. One way to do this is by creating incentives which cause initiative success to be in the sponsor’s best interest. If all of a sponsor’s incentives are tied to their regular job, then don’t expect a lot of time taken away from their regular job to work on the initiative.

Figure out what motivates these people (power, money, accomplishment, etc.) and then make sure that the initiative helps them get what motivates them.

Strategic initiatives often need sponsors in order to get approved and to get implemented. Therefore, having a good sponsorship strategy is important. Start looking for the right sponsors very early in the process. Get them emotionally vested in the project. If at all possible, keep the strategists actively involved with the sponsor long enough to ensure that the radical nature of the change is not lost over time. Finally, provide incentives to the sponsor, so that active sponsorship of the initiative is in their best interest.

Of course, if the idea is bad, even great sponsorship isn’t worth much. I’m not sure if there is a sponsorship strong enough to make a major success out of champagne in a can.

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