The status quo is expensive

Most organizations are pretty good at conducting a cost/benefit analysis for a contemplated new program. If a brand is considering investing in IT infra-structure or building a new concept store or making a strategic acquisition, the finance team will crank out cash flow analyses ad nauseam.

Executive teams will debate assumptions, argue over the appropriate discount rate and likely spin multiple scenarios to try to gauge the risk of saying “yes.”

Ultimately when the “no” comes, chances are it’s because the project or venture is deemed too expensive. Too much cash to invest, too much risk, too much of a distraction to the core business. You’ve heard all the reasons before.

But with all the time, energy and angst put into what happens if we say “yes” how often do we really contemplate what happens if we say “no?”

Maybe you’ve noticed that much of the incremental value created for consumers and investors comes from innovative start-ups that steal share from industry incumbents.

Maybe you’ve realized how quickly the world is changing and how the tried and true can become obsolete almost overnight.

Maybe you’ve witnessed your company fail to act soon enough and decisively enough in the face of new technology or rapidly evolving consumer demands.

Sure investing in innovation can be very expensive. But you are kidding yourself if you don’t think the status quo is pretty damn pricey as well.

Wabi-sabi

Wabi-sabi is a Japanese aesthetic concept that finds beauty in imperfection and the universe’s natural cycle of growth, decay, and death.

Embracing wabi-sabi means eschewing the unnecessary, getting rid of the clutter and valuing authenticity above all else.

Wabi-sabi requires us to accept the reality that nothing lasts, nothing is finished, and nothing is perfect. It requires us to not only believe that this is okay, but to see that there is great power and serenity in the practice.

For me, it is precisely my wrong-headed attachment to a concept of perfection that keeps me spinning, stuck in my fear of shipping.

For me, I can easily get distracted, adding complexity to a project or adorning an idea with superficiality, when it’s more than good enough just as it is.

For me, it’s so easy to see the risk in being wrong, without seeing the risk of inaction and the uselessness of endless worry.

When I inject wabi-sabi into my creative process, I produce more and stress less.

When I practice wabi-sabi I am able to fail better.

And that’s perfect enough for me.

 

 

 

All in

There is no shortage of business bestsellers, insightful white-papers and Harvard Business Review articles regaling us with multi-point programs to drive successful growth strategies. Consultants abound–including this guy–pushing clever frameworks to guide your brand to the corporate promised land.

Best demonstrated practices. Core capabilities. Disruptive innovation. Business process re-engineering. We’ve heard it all.

Yet despite an abundance of knowing, there is a paucity of doing. The same companies with the same access to the same information–employing high quality, well-intentioned  executives–get widely (and sometimes wildly) different results.

Having spent more than a decade working in omni-channel retail driving customer-centric growth initiatives, I’m often asked which company is the leader in this space. I usually say Nordstrom.

I led strategy and multi-channel marketing at Neiman Marcus during the time Nordstrom began investing in customer-centricity and cross-channel integration. So I can spout chapter and verse about the differences between our approaches and all the opportunities we missed. But with Neiman’s announcement this week of their new customer-centric organization (better late than never!) there are a few key things to point out:

  • Neiman’s has a lot of catching up to do
  • We knew the same things Nordstrom knew when they aggressively committed to their strategy nearly a decade ago
  • Nordstrom acted, we (mostly) watched.

We can quibble about some of the facts and the differences in our relative situations, but when it comes down to why they are the leader and Neiman’s–and plenty of others–are playing catching up, it comes down to this:

  • Nordstrom had a CEO who fundamentally believed in the vision and who committed to going beyond short-term pressures and strict ROI calculations
  • They went all in.

In a world that moves faster and faster all the time, organizations are really left with two core strategic options: Wait and see or go all in. Most choose the former and end up going out of business or stuck in the muddling middle.

Going all in doesn’t mean investing with reckless abandon or rolling the dice. Most all in companies do plenty of testing and learning. But testing with a view toward scaling up or moving on is a sign of commitment and strength not uncertainty and weakness.

Going all in must start at the top, with an executive who is wired to say yes. An all in strategy is fraught with risk. Mistakes will be made. You need a boss who has your back.

Going all in necessarily requires a supportive culture, but without complete organizational commitment it’s not nearly enough.

Going all in doesn’t pre-suppose a journey without bumps in the road. All in companies know how to fail better.

Culture eats strategy for breakfast?

Commitment eats strategy for lunch, dinner and a late night snack.

 

Okay, so what’s your plan?

It’s so easy to be the judge or critic.

It’s so easy to dismiss a new idea.

It’s so easy to do absolutely nothing. Until it’s not.

Being hesitant to adopt a radical new organization structure to address changing customer demands is understandable. It’s risky. But the problems and opportunities don’t disappear because you won’t act.

Refusing to compete against yourself makes a certain amount of sense, until you wake up to how much market share you’ve lost to the competition through your inaction.

Hating the Affordable Care Act may get you on Fox News, or make you the big man at the backyard BBQ, but it doesn’t fix the spiraling cost of health care or deal with the huge societal and financial costs of the uninsured.

Defenders of the status quo mostly get a pass. Until it’s too late. Than the day of reckoning can be pretty brutal indeed.

Fine. You see the failings in my idea? You don’t like my proposal?

Then you owe us your plan.

Go ahead, we’re listening.

 

January Christmas lights

I bet you know at least one family who leaves their Christmas decorations up way past the end of the holiday season.

Those of us who think we know the appropriate time to take things down, box them up and move on, roll our eyes or derisively mock our neighbor who just doesn’t get it. “What’s the deal with these people?” we wonder every time we walk or drive past their place.

Of course, the “guilty party” is oblivious to our judgment–or simply doesn’t care.

Of course, all of our consternation won’t change anything.

Of course, none of this is very important anyway.

So why do we care? Why can we not resist pointing the finger at the guy down the street?

I wonder whether deep down we all know that we are holding on to ideas, beliefs, practices and resentments that no longer serve us. And it is so much easier to shine the light on what YOU should dismantle or let go of, than for me to cast aside or put away MY things that are well past their expiration date.

I wonder how many things all of us–and our organizations–cling to when it is well past the time to move on.

And I wonder how many people are able to see my metaphorical list of January Christmas lights and think “what’s the deal with this guy?”

 

 

 

 

 

 

Customer Soar Points

Perhaps you’ve figured out that it’s harder and harder to differentiate your product or service in a world of seemingly endless choice and constant change. Perhaps you realize that even if your product IS better, commanding share of attention in an ever noisier world can be extraordinarily challenging.

The traditional approach to innovation is to assess customer dissatisfaction with current offerings and to then engineer a new and improved solution. If we address the sore points of the customer experience, the theory goes, incremental market share will come our way. Of course many have understood the limitations in this process, going back to Henry Ford’s apocryphal quotation about the customer’s ignorant desire for a faster horse.

The iPod was not invented because research unlocked consumer complaints that they had no way to carry around their vast music collection in their pocket. No focus group was held where those eagerly listening behind the glass heard a participant say “if I could only have instant access to every album I ever bought wherever I wanted. And oh, by the way, it’d be cool if it had a phone too.” There was no obvious customer sore point to be soothed.

What Steve Jobs “insanely great” design ethos brought to Apple was a focus on customer soar points. Completely new to the world approaches. Step functions in new utility. Products that were cool. Stuff that we wanted to talk about. Incremental improvement was not the goal.

For most brands this requires a fundamental re-think of what passes for innovation. For years, Apple was the outlier and it was easy to say that what they did was only appropriate for their segment–or that it was just too hard to replicate in other cultures. Ironically, today Apple has shifted its attention toward addressing customer sore points–battery life, screen size–and away from places where they can truly soar above the competition.

The world is becoming less of a place where an innovation strategy oriented toward rooting out customer annoyances or tweaking the design–going from 10 to the proverbial 11–can work. More and more, the emphasis needs to be on the remarkable, the unexpected, finding the place where the customer experience is truly elevated, not just enhanced.

Because when your customer soars, chances are your brand will follow.

You say you want a revolution

There are a lot of things I say I want to see changed. About the world. About myself. About you, if I’m honest.

I’ve shared with friends, in these posts, and to just about anyone who will listen, my exhortations about innovation, leadership, new ways to market, my desire for a more compassionate universe, the urgent need for creative solutions to societal problems and so on.

I’m often that annoying guy who posts motivational sayings on Facebook or Twitter and I regularly share inspiring stories of transformation or enlightenment. I’ve rarely met a Buddha quotation I didn’t like.

I say quite a bit. I’m not always so good at the doing part. And chances are neither are you.

It’s so easy to take the moral high ground from the cocoon of social media, by hiding behind religious doctrine or through verbalizing our strongly held beliefs over a glass of wine with friends.

Easy. Safe. Little chance of having to actually confront the real issues. Little chance of our looking foolish. Little chance of the discomfort from doing the actual hard work.

And no chance, really, of what we say making a damn bit of difference.

We say we want a revolution.

And yeah, we’d all love to see the plan.

But I’m finally starting to learn that beliefs are cheap currency. That knowing something is just the warming up part of the practice of doing. That planning is helpful, but very, very over-rated.

The world doesn’t have a shortage of well-intentioned people. Awareness of our problems is rarely the scare commodity.

What we need is a lot more action. We need to take the plunge.

I hope you’ll join me.

Gorilla suit

So I have this old friend who is rather quiet. Some might say “reserved.” Others might even call him “nerdy.”

Many years ago, a group of us were going to attend a Halloween party. For reasons I never fully understood, my friend decided to rent a gorilla suit as his outfit for the evening. At the agreed to time, I swung by his place so that we could walk over to the event together. He greeted me in full costume, gorilla head already in place.

Strolling the few blocks to our friend’s apartment, my gorilla companion was seen dancing with abandon, greeting passers-by with grunts and high fives and generally being a wild ape-man. It’s probably important to note at this point that he had NOT been drinking.

At the party, he was instantly the center of attention. Women flirted with him, guys wanted to borrow the costume. Whatever inhibitions he once had were gone. His pre-frontal cortex had apparently taken a several hour vacation. My friend basked in his faux monkey glory.

The next day, of course, he was back to his good old controlled and cautious self.

I’m sure those of you who are more educated about psychology than I–not a tough standard–will offer up erudite theories and explanations for his behavior.

All I know is that the gorilla suit didn’t make my friend a different person. The idea of it, the ego protection it afforded, simply helped unleash his potential. It freed his mind to take some risks, to consider new possibilities, to not be so afraid to look silly or vulnerable.

Maybe we all should have a gorilla suit in our closets to throw on when we need to push through our fear?

Or maybe we should just accept that what holds us back is all in our heads?

 

 

 

 

 

 

Dead brand walking

The business graveyard is filled with brands that have gone from the lofty heights of recognition, stature and profitability to flagging relevance and, ultimately, complete extinction. For every long-standing, legacy brand that continues to thrive (think Kraft or Coca-Cola) there is a former high flier that is now gone (think Borders or Oldsmobile).

Sometimes companies are hit by a largely unexpected exogenous force that sends them reeling. More often than not, the company’s ultimate demise surprises no one.

For some of us–investors or potential employees, for example–the key is to separate out the walking dead from the exciting turnaround story or the metaphorical Phoenix.

For business leaders, the obvious implication is to become aware of the early warning signs of decreasing brand relevance, accept the need to change and take the requisite actions. The obvious question, of course, is why are there so very many strategy meltdowns?

In my experience, brands go from healthy to critical in one or more of three ways.

First, you can’t fix a problem you aren’t aware you have. Many dead or dying brands lacked a fundamental level of customer insight. So not only did they not appreciate their vulnerability early enough, they didn’t focus on the important things quickly enough.

Second, just because you know something, doesn’t mean you accept it as the new reality. When I was a senior executive at Sears–the poster child for dead brands walking–we had tons of evidence that clearly showed our weakening relevance and declining profitability in our core home improvement and appliance businesses. Did those that could have changed Sears’ destiny truly accept that without aggressively attacking these issues it would eventually be game over? Sadly, then, as it is now, the answer is “no.”

More recently, when I ran strategy and multi-channel marketing at Neiman Marcus, we had plenty of customer research and analytics that our strategy of narrowing our assortments and pushing prices ever higher was losing us valuable customers to Nordstrom (among others). Did we accept that it constrained our growth and made us increasingly vulnerable in an economic downturn? Fortunately the harsh lesson of the recent recession–and a new CEO–”forced” Neiman’s to address these problems before they became crippling.

Lastly, even with keen awareness and complete acceptance of new realities, we regularly fail to take the (often radical) action needed. This is mostly about fear. Fear of being wrong. Fear of looking stupid. Fear of getting fired. Fear of risking one’s legacy or resume value.

In fact, history teaches us that it’s far more common to see executives holding on to a mediocre status quo rather than risk competing with one’s self or making a big bet on that new technology or innovative business model that is ultimately used against them by an upstart competitor.

Frankly, if your inability or unwillingness to act on saving your brand is rooted in fear, don’t hire McKinsey or Bain (or me for that matter) to help you with your strategy. My advice would be to get yourself a new management team and/or go see a therapist. It’s far cheaper and more likely to work. And do this before your Board figures it out.

Dead brands almost never die by accident. They die by leaders failing to see the signs of terminal illness while there’s still time to save them. And they die by management teams’ inability or unwillingness to take the necessary and decisive action before it’s too late.

Hopefully dead brands walking can be a lesson to us all.

 

 

Easy or good?

It’s far easier to run your business with a paint-by-numbers operating model.  Why risk the vagaries of human interaction?

It’s far easier to craft a one-size fits all marketing plan. Why invest in complicated customer analytics and the complexities of managing vast numbers of different campaigns?

It’s far easier to focus on efficiency rather than effectiveness. Doesn’t Wall Street reward brands that run a tight ship?

It’s far easier to remain product or channel focused. Organizing your business around customers–and the realities of the omni-channel blur–means blowing up many existing processes, metrics, incentives systems and management structures.

It’s far easier to focus on the certain short-term fix, rather than commit to a long-term program of testing and learning and building foundational capabilities. After all, how can we be sure we will ultimately generate sufficient ROI?

The problem is that easy is not the same as good.

And good enough is rarely good enough anymore.

Remarkable. Relevant. And built for me, rather than built for everyone, is what it will take for just about any business that cannot win by price alone.

And like it or not, easy is not going to cut it.