1 - When you are a new Leader, you are frequently taking over a situation where the "brand" is struggling. It's your job to fix the profit and loss statement.

Take a look at the p&l below. We'll address that in a moment.

2 - When I worked at Eddie Bauer, during the stone ages, business was not great. Our online/catalog division bumbled around at 5% pre-tax profit (if business was good).

3 - We built a "Brand Marketing Team". Their job was to fix the perception of our company.

We had an outdoor heritage.

We followed our customers, and our customers took us down a women's apparel path (common for the late 90s).

4 - The Brand Marketing Team would be charged with modernizing our creative. They would update it.

5 - We had an image of a 55-60 year old dude wearing jeans along a river. The creative always worked. It moved jeans.

We were showed how this creative needed to be updated.

6 - The 55-60 year old greying dude wearing jeans was replaced with a bunch of shirtless 28ish year old men wearing jeans carrying a canoe over their heads.

This was the direction we were headed in. We'd appeal to a modern audience. We'd appeal to younger customers.

7 - Our Brand Marketing Team released the new creative strategy across all imagery online and in catalogs.

Sales instantly decreased by about 10%. Whump. Thud.

8 - This brings us back to the p&l statement.

Look at what happens to profitability (the bottom row) when sales drop by 10%.

You lose (in this case) 70% of your profit.

Hint: That creates a panic in your company. That's not acceptable.

9 - Is this the fault of the Brand Marketing Department?

No.

It's a Leadership issue.

The Brand Marketing Department was doing what they were asked to do.

10 - One of the hardest things to do in business is reinvent a business on the fly while protecting the existing business.

The goal is to use the profit of the existing business to protect the reinvention effort.

That is so darn hard to do.

11 - We went right back to the old creative (within about three months), and sales rebounded right back to prior levels.

12 - A "reinvention effort" requires funding. Somebody has to fund the effort and protect the p&l so that reinvention can happen.

Otherwise, you'll fail in all likelihood, and you'll go back to what you used to do, protecting the p&l but harming the future.

It's tough stuff.