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In Journey to the West, most demons are actually escapees from the "headquarters," with only the White Bone Demon being a wild one. Sun Wukong cannot defeat these demons, but those "headquarters" leaders can easily "subdue" them without lifting a finger, simply because they hold "magic tools."

A strong headquarters is a product of a centralized system. Regardless of rank, headquarters staff always feel a sense of superiority over frontline personnel, as if they are "half a grade higher." Chinese people prefer working at headquarters because, although the pay is not high, it is respectable. Headquarters functional departments have an innate sense of superiority over frontline staff. This sense of superiority breeds not only bureaucracy but also "soldier-ocracy." Although "soldier-bureaucrats" have no power, they can manipulate processes. Some even boast, "I may not be able to make things happen, but I can easily ruin your plans." In short, headquarters has become the "problem that creates problems," and it is imperative to take action.

Headquarters is always far from the front lines

  • Case: While consulting for a company, we found it extremely difficult to communicate with the boss, mainly due to differences in basic market understanding. So we urged the boss to join us on a market visit. From the distributor, we learned this was the boss's first "personal expedition" to inspect the market, even though the company had been operating for over a decade, primarily in the provincial market. For this boss, the market was close at hand yet far away. After the market visit, our communication barriers with the boss naturally disappeared.
  • Diagnosis: Because headquarters is far from the front lines, headquarters and grassroots marketing personnel often cannot communicate in the "same language." Some call this phenomenon "the boss speaks bird language in the sky, while subordinates do pig things on the ground." For enterprises, the "thrilling leap from commodity to money" occurs at the front lines; the distribution channel is merely a transfer of warehouse stock. However, the voices headquarters hears rarely come from the front lines; the strongest voice is that of distributors, who act as an "insulator" between the boss and the front lines. When I worked at a company, my initial market visits always started with distributors, then checked the front lines, only to find that most of my time was taken up by the distributors' "enthusiastic hospitality." Later, we realized that distributors are most interested in sales policies, not the front lines, while manufacturers are most interested in the front lines, not sales policies. The difference in starting points between manufacturers and distributors makes distributors a natural "insulator" between the boss and the front lines. So we changed our market visit approach: first check the front lines, then meet with distributors. This way, we truly understood the market situation and realized that what we saw under the guidance of distributors was not necessarily "seeing is believing." As market focus shifts downward and distribution channels flatten, headquarters seems closer to the front lines, but the reality may be the opposite. While channels flatten, internal management layers increase. Previously, the marketing system had only 1-2 management layers; now it commonly has 3-4. The more marketing management layers, the farther the boss is from the front lines, and the marketing system again plays the role of an "insulator" between the boss and the front lines. Some may question: headquarters has big-picture responsibilities, why should it care about the front lines? We believe that marketing direction and major policies are usually controlled by headquarters, but the front lines are the source for determining marketing direction and policies. In most cases, headquarters relies on formalized information transmission to understand front-line conditions, but no one in the marketing system can influence marketing direction and policies as much as headquarters. Moreover, China's front lines undergo significant changes periodically, requiring bosses to personally experience them. The distance between headquarters and the front lines is not about physical distance but psychological distance. The closer headquarters is psychologically to the front lines, the closer it is physically. We do not require all bosses to spend over 200 days a year in the market like Zong Qinghou of Wahaha, but headquarters must genuinely care about the front lines. The management system works like this: whatever the boss cares about, the system will selectively report on. If the boss ignores the front lines for a long time, the system will not bother the boss with front-line issues, except in two cases: when there is major "good news" to claim credit or major "bad news" to ask for help. Management scholars have long known that corporate bureaucracy inevitably produces "systematic errors." They designed an exception under the normal command and reporting system: superiors can skip levels to inspect subordinates' work. For China's rapidly changing market, if bosses want to keep pace with the market, they "can and must skip levels to inspect front-line work." Because the characteristics of the Chinese market determine: the closer the boss's heart is to the front lines, the closer to success.

Headquarters always uses execution as a scapegoat

  • Case: No Excuses is one of the best-selling business books. Some companies give a copy to every salesperson, and others organize study sessions. Along with the earlier A Message to Garcia, some bosses finally found an excuse for poor performance: salespeople are not like Rowan, who delivered the message to Garcia.
  • Diagnosis: The popularity of "no excuses" and "crossing the river by feeling the stones" is a tragedy for Chinese management, as it provides an excuse for incompetent managers. When headquarters managers set a target without any basis, they always say, "No excuses!" Then salespeople are left to "cross the river by feeling the stones." Successful companies do not rely on mass recruitment to find "capable" salespeople through a process of elimination. Instead, they first find a marketing model that solves the company's marketing problems, and use this model to gradually enable average people to operate it. If you expect every salesperson to create their own model and "cross the river by feeling the stones," most will end up falling into the river. Therefore, successful companies first have "excellent models that create excellent salespeople," and only then do "excellent salespeople create excellent companies." What can a company that does not provide a support platform offer its salespeople? Only products they do not know how to promote and endless pressure. What kind of salesperson has the required abilities? They must have market planning and entrepreneurial skills. What a high requirement! This is not a requirement for salespeople; it should be for startup bosses. If salespeople truly had such abilities, companies might not be able to retain them. Excellent companies expect salespeople to be creative to "add brilliance to the present splendor," not to "provide fuel in snowy weather." Companies should provide salespeople with a mature marketing model; as long as they operate according to the model, the market will not have problems. Marketing models do not fall from the sky, nor can they be copied from other companies. They require headquarters to fully mobilize internal marketing resources based on market possibilities or opportunities, design a marketing model with the company's own characteristics, and have the ability to help salespeople run it. This task can only be undertaken by headquarters or decision-makers.

Headquarters policies always change drastically by the time they reach the front lines

  • Case: A food company conducted thorough research and planning to launch an important new product. At the launch meeting, experts and marketing management explained the significance and procedures of the new product launch and answered various questions from attendees. After the meeting, marketing staff entered the market with the New Product Launch Execution Manual. When the meeting ended, all headquarters staff breathed a sigh of relief, waiting for good news from the market. Ten days later, the marketing manager made a special trip to the target market and found that the seemingly flawless new product launch had been executed with numerous flaws. When the marketing manager visited distributors, he discovered that the regional marketing supervisors who attended the meeting had not conveyed the meeting's spirit to salespeople, let alone to distributors. The regional supervisors only communicated a simple message to distributors by phone: the factory has launched a new product at a price of XX. The meeting spirit and the New Product Launch Execution Manual were all "embezzled" by the regional supervisors.
  • Diagnosis: The failure to convey headquarters policies and spirit seems to be the fault of regional managers, but the root cause lies in headquarters. During channel flattening, we found that manufacturers' sales management systems have become multi-layered. Previously, the typical sales management system was: headquarters → provincial (or regional) salesperson. Now, the typical sales management system is: headquarters → regional manager → provincial branch → city office → county salesperson. While channel structures flatten, manufacturers' sales management systems become hierarchical, which is the "flattening trap" of marketing. According to our observations, the management penetration of local Chinese companies is usually only 1.5 levels, but the typical sales management system now has 4 levels, far exceeding the management capability limit of local Chinese companies. Therefore, if marketing policies and meeting spirit cannot be directly communicated to salespeople and distributors, but rely on layer-by-layer transmission through the management hierarchy, policy distortion is normal. Not only do headquarters policies get distorted, but front-line information also gets distorted when fed back upward. This confirms our long-held hypothesis: only companies with strong management capabilities can effectively implement channel flattening. We believe that many companies collapse as a result of over-expansion and over-flattening, leading to management failure. We have found that industry leaders that withstand the test of time have a competitive advantage not in marketing strategy but in management penetration. Our conclusion is: marketing breakthroughs rely on marketing strategy, but ultimate marketing success relies on management penetration. Some marketing experts are puzzled why many small and medium-sized enterprises (SMEs) in China can thrive. In fact, this is the result of the flattening trap of strong industry players. For SMEs, both channels and sales management systems are flat. For strong players in the industry, only one level can be flat. Thus, effective management measures from strong companies' headquarters, after being attenuated layer by layer through the sales management system, become a spent arrow by the time they reach salespeople. If the flattening trap is not resolved, strong companies may not be more competitive than SMEs in grassroots markets.

Headquarters always knows only "cutting the feet to fit the shoes" The vastness of the Chinese market and the huge differences between regional markets far exceed the imagination of headquarters managers who sit in offices all day. Yet, most headquarters staff still sit in offices and direct frontline marketing personnel based on imagination. Chinese enterprise marketing headquarters generally dare not delegate authority, because "once delegated, chaos ensues" has been proven countless times. Therefore, centralization is sometimes necessary. However, centralization cannot be an excuse for headquarters to demand frontline personnel to "cut the feet to fit the shoes" and adapt to headquarters. The relationship between Chinese enterprise headquarters and regional managers is like bargaining in a business deal. Headquarters has two typical approaches: One is that headquarters produces a "unified plan" and then requires each region to "cut the feet to fit the shoes"; The other is that because headquarters does not understand regional market conditions and cannot produce specific policies, it delegates the task of creating policies and plans to frontline managers. But headquarters is not confident in frontline managers, so it starts "asking for the sky and bargaining down to the ground." Headquarters always says "no" to regional managers' requests at first, only giving in when pressed, and "cuts the request in half" when meeting. As a result, they often miss the timing and intensity of market opportunities. A strong headquarters is a product of the era of mass products, network distribution, and advertising pull. Facing highly differentiated regional markets, strategic regional markets become inevitable. Therefore, the outcome must be the virtualization of headquarters, with market decision-making shifting down to strategic regional markets. For companies that have achieved seamless market coverage, this is a real challenge. But few companies truly realize this.

Headquarters always finds faults more than it finds experiences Almost all companies lament that marketing innovation is too difficult, but at the same time, there is a wealth of grassroots marketing innovation that headquarters fails to "discover," resulting in a coexistence of innovation poverty at headquarters and innovation prosperity at the grassroots. Innovation at the individual salesperson level is usually unconscious; sometimes, even after innovation has occurred, the salesperson does not realize they have made an innovative "feat." Individual salesperson innovation may be a flash of inspiration to solve a problem, an accident, a result of high pressure, derived from unique experiences or knowledge, a new understanding of consumers, or even the result of a mistake. The biggest problem is that salespeople rarely recognize the significance of their own innovations. Misled by erroneous concepts for a long time, they believe innovation is a "great" thing, a "patent" of certain professionals at headquarters, and that their small deeds cannot count as innovation. Therefore, a large number of valuable innovations are ignored by salespeople. Innovation at the organizational level of headquarters is not the result of marketing managers sitting in offices and brainstorming, but comes from discovering salespeople's innovations. Elevating locally successful innovations to a global level is the responsibility of headquarters. Marketing innovation at the individual salesperson level is usually a tactical measure to solve specific problems. However, if headquarters management discovers the value of a salesperson's innovation and promotes it on a larger scale, it effectively elevates individual tactical innovation to corporate strategic innovation. Headquarters precisely lacks such a discovery mechanism. As a result, individual salesperson innovations remain small-scale local efforts, without recognition or elevation from headquarters. Meanwhile, corporate-level innovation lacks a source, leading to innovation poverty. As long as sales meetings are held at headquarters, they are always "complaint sessions" or "policy request sessions." If headquarters personnel would condescend to visit the grassroots and summarize experiences and lessons, marketing innovation would be easily discovered.

Source: Teacher Liu's Forum New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 16 to 18. This conference will focus on the topic of "Breaking the Game" , with in-depth discussions involving brand owners, supply chain service providers, distributors, retailers, and others. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics such as channel innovation, city distribution logistics, and distributor transformation , it will add multiple parallel forums on new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail . Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and approaches to break the game in 2019 and return to high-speed growth. Review of Previous Conferences -END-