Profitable Growth Matters Most

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If you're not growing as a business, you're dying. If your market is growing and you aren't, you're losing share.

These realities are crucial for marketing executives to internalize. Although I've invested the bulk of column space during my previous eight entries to strategy and the operational rigor that enables its execution, these basic truths drive all that Mitel has done and accomplished over the past eight months.

Here's another truth: The two commercial metrics that matter most are customer satisfaction and profitable growth. Everything else is interesting but less relevant.

I intend to discuss customer satisfaction in more detail during next month's entry. Right now, I want to talk about profitable growth: how we achieve it and how we measure it. On the measurement front, I'm happy to report that Mitel delivered a strong close to our prior year and that momentum has carried over into our 2014 fiscal year, which started May 1.

When we shared our 2013 fourth quarter and fiscal year results in late June, our CEO, Richard McBee, announced that we had exceeded our guidance for revenue and gross margin. We posted solid sequential revenue growth of 6%, which McBee attributed to our continued focus on both our premise-based business and our cloud service offerings. We also used earnings announcements to share news that we had completed our acquisition of the contact center original equipment manufacturer (OEM) supplier prairieFyre Software Inc. (at a net cash cost of roughly $20 million). The acquisition enables us “to capitalize on the increasing market demand for contact center solutions,” McBee said.

We also significantly enhanced our sales leadership with the appointment of three new sales executives in the Americas. And we announced a strategic partnership with Vidyo, which will allow us to deliver a comprehensive offering that integrates Vidyo's high definition (HD) video and telepresence solutions across Mitel's entire line of unified communications and collaborations (UCC) products in the cloud. On that note, we've also continued the growth of our MiCloud customer base with more than 33,000 new cloud users added in the 2013 fourth quarter, bringing the total installed base to more than 262,000 MiCloud users.

So I repeat: Profitable growth and customer satisfaction, in concert, are the only metrics that should matter to a company and to all of its leaders—including the CMO. How you, as a CMO or marketing professional, contribute to, manage, and improve these measures is what is truly difficult; it's also what separates the winners from the also-rans. To perform well by these measures, you must have a clear strategy, good people, great execution, operational rigor and discipline, and a growth mind-set.

The latter has been a major focus particularly for me, my staff, and our entire organization for the past year. And, as I noted in “Marketing Needs Internal Engagement, Too”, our move to a monthly operations cadence has been a tremendous step up in ensuring that we not only monitor our key metrics, but more important, manage them by addressing and course-correcting any gaps between our actual performance and the goals in our plan. That granular and monthly—as opposed to less granular and quarterly—cadence also has enabled us to expand a consistent operational rigor across all of Mitel.

Marketing and M&A

Savvy acquisitions represent another way to grow, and marketing should play a key role throughout the due diligence phase all the way through to the post-acquisition integration.

Along with other Mitel functions, marketing fulfilled many roles during the prairieFyre acquisition. Our activities included due diligence; specifically, conducing a market assessment, as well as customer and channel assessments. We also conducted brand positioning, awareness, and preference reviews in addition to completing an organizational synergy analysis that helped identify the pros and cons of purchasing the company. The pros were far more prevalent. We've enjoyed a close OEM relationship with prairieFyre for many years, and the acquisition represents a natural evolution of that relationship.

Given that the contact center market is a growth market, as well as a growing part of our business, we felt that we absolutely needed to have our own offering. Achieving that, we decided, would ensure our ability to more closely control our own destiny rather than being completely reliant on an OEM.    

Immediately after the acquisition was finalized, we renamed the offering MiContact Center, in keeping with our new naming convention, which I explained in “Relevancy and Accountability Count” (August 2013 issue). We're in the process of designing a strong MiContact Center product launch, which is slated for autumn.

How (and how not) to shift industry perceptions

While growth and customer satisfaction metrics matter most, there are related forces that influence your performance to these measures. As mentioned, having a clear strategy, the right talent, and a culture of operational rigor are important levers that enable you to perform to these objectives. However, even when you have the right strategy in place and are executing it according to those two key measures, your work is just beginning.

You still need to make the industry aware of the fact that you're executing that strategy. This communications effort represents an ongoing process. And while it shouldn't be entirely event-driven, events can and should play a role in the effort, particularly as a communication platform. Our recent Business Partner Conference (BPC) aimed to communicate our strategy and vision, as well as articulate the new Mitel direction, and set a very clear tone of conveying “business not as usual.”

In the buildup to the BPC we put a lot of effort on message development and consistency, reviewing nearly 100 different classes, presentations, and content elements to ensure quality and consistency. We acknowledged that Mitel had become an inside-out focused company; by falling prey to that common misstep, we began to lose sight of the most important constituent we serve: our customer. All of our messages and our tone supported or tied to conveying Mitel's 180-degree turn to a customer-first approach, the basis for BPC's “outside-in” theme.

 Although I'm biased, I believe that the BPC played a major role in influencing industry perceptions both internally and externally. Judging from headlines like “Mitel Reinvigorated” written by analysts and reporters who attended the conference, others seem to agree with that assessment.

For example, of the “outside-in” theme of our BPC, analyst Jon Arnold wrote, “[Mitel's] focus has been turned on customers and from there you work backwards to serve them on their terms. All customer-centric companies follow this thinking and the great ones have these values in spades throughout their culture.” In response to Mitel's vision, which I presented at the conference, Arnold wrote that I “laid out the textbook moments-of-truth mantra from the world of customer satisfaction research, and if they stay on this path, they'll be more than fine.”


I'd like to think so.

We've also received a lot of media coverage outside our conference and earnings meeting. Those two events generated 37 articles in June alone. Our prairieFyre announcement (21 articles), product-naming architecture (14 articles), and personnel announcements (9 articles) also generated other coverage that has played a role in helping us shift industry perceptions.

I would hesitate to call these “results.” We recognize that media lines in general are blurring. Print media journalists are diminishing in influence, as are their print journals. There is an emergence of the analyst/market commentator as opinion maker.

While these people may have been traditional journalists, they more often come up through an industry or analyst route. The source of their influence is credibility; they have industry insight, intimacy, and more often than not, strong opinions. Mitel is working closely with these new media influencers. We're also evolving from a traditional (i.e., vanilla) form of corporate public relations for two important reasons: the media doesn't like traditional PR and customers don't care about it. While this form of communications may make a brand feel good about itself, it almost always receives short shrift from everyone else.

We're starting to develop “non-vanilla” opinions and strong points of view. We will comment and even take positions in and about the market that may not be mainstream. Some would call this approach “provocative messaging.” I would call it “being relevant.” This transition will take time for us to complete; we need to relinquish some old habits. That said, being more provocative will not lead us to bash the competition or lower ourselves to other tactics that we've seen in our market. Instead, we'll focus on the market, our relevance within it, and how we help our customers solve their communications and collaboration challenges—in their words.

We strongly believe that this approach will help us communicate more effectively—just as our conference helped us on that score. For me, the most important takeaway from our BPC was a renewed belief in our direction, our brand, and our partners, and in how we'll take market share by resolutely focusing on “outside-in” and being more customer centric.

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