Posted on Mar 3, 2014

Learning To Survive When Everyone Is Against You

Every business faces serious challenges. Some never seem to end. To survive such challenges, there are a few businesses from which much can be learned.

One of them is in the tobacco industry.

Regardless of your opinion about cigarettes and the serious health concerns associated with smoking, it is still a huge money-making business. It’s also a highly complex one where the industry players continue to survive.

A Little Background

In 1998, four of the largest tobacco companies in the United States – Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard – settled a long and arduous legal battle with 46 states over tobacco-related health-care costs. The result was a massive $206 Billion settlement – paid out over 25 years – known as The Tobacco Master Settlement Agreement.

In 2003, Philip Morris – the world’s largest tobacco company – rebranded itself as Altria group, Inc. in an effort to change its image from “bad people selling addictive carcinogens” to one marked by “Altruism.” At the time it was ranked #11 on the Fortune 500 list of companies. You’re likely familiar with many of their brands, including: Marlboro, Benson & Hedges, Players, and Skoal.

This was a huge business. But since then, sales steadily declined.

By 2008, Altria completed the spin-off of Philip Morris International (or PMI) to set it free. It is now the leading global tobacco company operating in 180 markets around the world – excluding America.

In other words, Altria still markets their tobacco products in the United States (under the name Philip Morris USA); while PMI markets them everywhere else.

This split helps explain why Altria is now down to #159 on the Fortune 500 list, with sales of less than $18 Billion; while PMI is #99 on the list, with sales of over $31 Billion!

PMI is now the BIG dog in tobacco, even though they sell no tobacco in America. Without the burdens of American legal claims, PMI is free to expand and grow anywhere in the world. Well, sort of…

Values at PMI

The United States is not the only place where anti-smoking laws are prevalent. PMI continues to face lawsuits in various countries around the world.

Yet, they continue making money. A lot of money!

So how does a company like PMI survive – and thrive – when faced with never-ending business threats? What are the values that bond together 87,000 employees around the globe?

PMI touts the following 5 values when they look for in a prospective employee:

Courage – We are always looking for those rare leaders who possess the self-assurance to stand up for their ideas. True leadership sometimes means being a lone voice, but it always means having the courage of your convictions.
Clear and constructive communication – Clear communication between team members is vital to avoid potential misunderstandings. A candid, honest exchange of ideas creates an environment of trust and inspiration. That means not only giving constructive feedback, but also being a good listener.
Entrepreneurial spirit – Our people have a boundless curiosity, and are always looking for possibilities where others might not see them. They possess unique insight, and they are not scared of tackling complex problems.
Efficiency – Our employees strive for excellence through efficient work habits and skillful performance. With a combination of well planned processes, smart priorities, and agile problem solving, our people enjoy doing the job, and doing it right. The results are often impressive.
Emotional intelligence – Our behavior and moods affect everyone around us. Teamwork means being emotionally perceptive to the feelings of others, and having the sensitivity to influence the moods of our teammates in a positive way.

Two of these values are common to what most businesses demand: good communication (#2) and teamwork (#5).

But when you consider the other 3 values – Courage, Entrepreneurial Spirit (or Independence as I would define it); and Efficiency – it makes for a very powerful combination.

3 Powerful Values

Consider the definitions of these three differentiating values and how they apply to an industry such as tobacco that is constantly under attack.

Courage means a characteristic of confidence; not easily intimidated; fearless; brave.

PMI looks to hire people who are not intimidated by what others think, and are possibly even a bit cocky.

Independence means freedom from control, constraint or influence of others; autonomous.

PMI wants individuals who are willing to experiment with new ideas; possibly even unconventional ones.

Efficiency means skillfulness in avoiding wasted time and effort; careful use of resources.

PMI needs to carefully manage their resources to ensure they have the maximum revenues to fight the next fight – and settle previous fights. Note that PMI clearly articulates the 3 things to achieve efficiency:

Well-planned processes
Smart priorities
Agile problem solving

Love ‘em or hate ’em, one could learn a lot from this company.

Applying the Learning

Hopefully your business or organization is not under such pressure or exposed to such constant threats as PMI. However, there is no need to wait until your business is “up against the wall.” There is no time like the present to learn from such successful marketers.

Consider what would happen at your company if you combined the values of Courage with Independence and Efficiency.

What kind of impact would this have on your culture?
Who would be the right members of your team to embrace each of these values?
How would this position you versus your competitors, both direct and indirect?
Could your competitors easily replicate these values? If not, why?
What are the downsides to embracing these three values together? Does the upside warrant it the risk?

If all three of these values are too much to embrace right now, consider just one: efficiency. What would happen if you implemented the 3 steps PMI uses to achieve efficiency: well-planned processes; smart priorities; and agile problem solving?

Building a successful business can be challenging in even the best of times. To survive the various battles that arise over time, there is much every marketer could learn from studying a company such as Philip Morris International.