Ask the nearest hippie

In his dissent on the Supreme Court’s historic decision on gay marriage Justice Antonin Scalia offered this:

“Who ever thought that intimacy and spirituality (whatever that means) were freedoms? And if intimacy is, one would think that Freedom of Intimacy is abridged rather than expanded by marriage. Ask the nearest hippie.”

Regardless of where one stands on the question–and I stand firmly on the side of love–we should be impressed by Scalia’s ability to reach back some 50 years for a cultural reference, all the while doing virtuosic leaps of logic. Then again, perhaps he meant “hipster.” Also perhaps his marriage of 48 years ain’t going all that well. Maureen, you are in my thoughts and prayers.

But whether he meant hippie or hipster, he may be on to something.

Hippies defied convention.

Hippies valued love over war.

Hippies created lots of music and art that has stood the test of time.

Hippies were inclusive.

Hippies challenged the status quo, often pushing society to embrace new norms.

Many hippies were far more remarkable than those who shunned them.

Maybe we could use a few more hippies?

Ask the nearest hippie indeed.

And we just might want to heed their advice.

Why we don’t know why

If you are anything like me, whether it’s in your personal or professional life, you have a list of goals you seek to achieve.

And if you are anything like me, you don’t always achieve them. Which begs the question: why?

Sometimes the answer is painfully obvious. Other times it takes more work. Yet, I am struck by how often, whether it’s my own stuff, interactions with friends and colleagues or issues my clients are struggling with, the answer is “I don’t know.”

Why are we losing share to the competition? I don’t know.

Why isn’t our social media strategy working? I don’t know.

Why am I working harder and harder and getting less accomplished? I don’t know.

Why does an innocuous statement by my partner, make me instantly defensive? I don’t know.

It seems to me there are a few reasons why we don’t why.

Sometimes, no matter how hard we dig, it’s simply unknowable. I’d put the “God” type questions in this bucket.

Sometimes, we haven’t dug deeply enough. If it’s important, if we make it a priority, more work–or perhaps a radically different approach–stands a pretty good chance of unlocking the root cause.

Sometimes, if we’re brutally honest with ourselves, we don’t want to know the answer. We’re afraid of being confronted with the harsh reality of our situation. We fear being seen for who we really are or having to acknowledge that we aren’t a victim. Accepting accountability and seeing that the only road is difficult and scary is often to great a burden to bear, much less wake up to and own.

Of course it’s pretty easy to go through life blissfully ignorant, to avoid an honest look in the mirror.

Until it isn’t.

I fought the math and the math won

Emotion often trumps logic.

We buy the story before we buy the product.

How our experience with a brand makes us feel can overcome the simple calculus of pro’s and con’s.

Because of this, I advise start-up entrepreneurs and deeply experienced corporate types alike to start with the story, to envision the full experience we want to deliver, to design for how we intend the customer to feel and how we hope they will amplify our message to their tribes.

But then comes the math.

And, alas, there is no escaping a few basic equations.

You can’t escape the fact that customers can’t buy your product or service if they aren’t aware of it. In an increasingly noisy world, where the toll-takers who often control getting your brand in front of the right customers keep raising their prices, you had better crunch these numbers.

If you are in any kind of retail, you can’t escape the math that your sales are a function of the amount of traffic you drive to your store or website, your conversion rate, the average unit retail of the items sold and the # of items purchased. Failing to understand these dynamics–and the throughput at each stage–is often where things start to fall apart.

In any business, if the lifetime value of the customer is less than the cost of acquisition and ongoing costs to serve, your numbers will never add up.

If it’s costing you more and more to acquire new customers, while you are experiencing high-rates of churn among existing, lower cost to acquire customers, the wall is fast approaching.

If you are adding a lot of cost to become omni-channel while merely spreading existing sales over a now higher cost base, you don’t have to be Descartes to know that’s not a long-term winning formula.

There are two ways we fight math. The first is to ignore it in the first place. The second is to stick our head in the sand when it starts to become more and more obvious that our numbers don’t add up.

Math–like feelings, ironically–doesn’t go away because we ignore it. Math doesn’t care that we are all about brand building. Math doesn’t have an opinion on how disruptive our start-up is. Math couldn’t care less that we hope to get acquired and cash out before we have to demonstrate profitability. Math is immutable and dispassionate. Math is a stubborn you-know-what.

Fight the industry incumbents all day long. Fight The Man, the power, the haters and the status quo as much of you want. Math doesn’t care.

But at some point, your numbers will have to add up and multiply through. And you’re going to want math on your side.

The tranquilizing drug of gradualism

In his “I have a dream” speech, Martin Luther King, Jr. challenged a slow and steady pathway to civil rights reform.

Those in favor of an incremental approach feared that making waves–that being too confrontational–would backfire. It was seen as too risky a strategy.

MLK argued that patiently working against the wrongs endured by millions created the illusion of progress. He worried that by merely chipping away at injustice, we were lulled into a sense of advancement when very little was actually being accomplished. Gradualism was not only misguided, it was actually more risky. Ultimately, our delusions prevented us from making substantive change; the change that was so desperately needed.

These challenges are hardly unique to the struggle for social justice.

Many organizations say all the right things but do very little. Companies invest piles of money and countless hours in largely meaningless tweaks to their offerings. Simple product line extensions count for “innovation” at most brands. New executive titles are created, and organizations re-shuffled, to give us a sense that we are doing something. Yet that something is typically more of the same under a different guise. All too often we become intoxicated by our words at the expense of our actions.

Continuous improvement amidst fundamental disruption doesn’t cut it.

A go slow approach to innovation when customers and markets are evolving rapidly only guarantees that we will fall further and further behind.

A frenzy of activity (supported by cool PowerPoint decks) may make us feel good, but until it ships it doesn’t count.

And unless we can rise above the clutter and the sea of sameness–if our work doesn’t make waves–we might as well not bother in the first place.

Send in the clones

How’s this for an idea?

Let’s sell products that are pretty much identical to everything else that’s already out there in the market.

And then let’s employ advertising that is virtually indistinguishable from our competition.

Every week we’ll have big sales–and if you’re really crafty, you can use our coupons to save even more!

Sign-up to be on our email list and we’ll give you 10% off your next purchase. And then, just about every day, we’ll send you an email highlighting some of our me-too products while also reminding you how much you can save.

Be a good customer and we’ll throw in free shipping. Oh, you hardly ever buy from us? No worries, you get free shipping too!

We’re all omni-channel and what not, so of course we’ll have e-commerce. And our site will look like every other site. We want you to feel comfortable.

Oh, you didn’t buy just now when you were on our website? That’s cool, we’ll just keep serving up ads on Facebook and everywhere else you go on the internet. Hope you don’t mind the little interruption.

And, after we do all this and we don’t get the sales we want, we’ll just launch a “loyalty” program that–wait for it–rewards you with gift cards so you save even more!

As silly as this sounds, it’s the play book for many retailers. They continue to swim in a sea of sameness. Most often, their default mode is to compete on price because, faced with a paucity of actual difference, it’s the only thing that seems to drive sales.

Unfortunately, the fact is most categories aren’t growing faster than the rate of inflation. The fact is most consumers have more choices than they can possibly sort through and make sense of. The fact is share of attention is the new battleground. The fact is almost all price wars end badly. The fact is any real growth needs to come from stealing share.

Imitation may be the sincerest form of flattery. And it may seem safe.

Yet the fact is it is just the opposite.

seth

Pretending it’s new

When some leaders wake up to reality, when they slowly start to notice that things are in fact meaningfully different from how they were before, we often witness a self-absorbed, I’ve just found Jesus and I need to tell you all about it, kind of thing take over.

“Consumers who shop multiple channels are more valuable than single channel customers” they breathlessly announce at conferences.

“Stop thinking about e-commerce as a channel” becomes the title of a newly released white-paper.

“We need to differentiate ourselves on experience” the CEO implores a group of assembled executives.

Suddenly everything is about “seamless”and “omni-channel” and “the single view of the customer.”  Their sentences start to include a disquieting use of “integration”, “customer-centric” and “relevance.” Investor presentations and annual reports turn into games of buzz-word bingo.

I hate to drag you out of your pink cloud, but just because you took a long time to notice, doesn’t mean it’s a recent phenomenon. Responding energetically to a totally foreseeable crisis does not make you a great leader.

Pretending it’s new may prop up our ego or cast ourselves in a better light. Better late than never, huh?

Pretending it’s new may buy ourselves some time with a less than savvy Board. What they don’t know can’t hurt them, right?

Much of what passes for insight today has in fact been known for years if only we had taken the time to become aware, confront its import and accept the implications. It’s not new and we shouldn’t pretend it is. Of course, neither is this.

Now obviously we can’t go back and fix all the should of’s and could have’s.

But we can ask ourselves what of potential importance might we be missing right now?

We can go into understanding what our fear causes us to avoid.

We can accept that often our pretending creates the illusion of keeping us safe.

The drip method of irrelevance

At first, the shift is almost imperceptible.

With quarterly earnings expectations to hit, we tell ourselves we can easily save a few bucks by automating some of our customer service functions. Or perhaps it’s through simplifying our organizational structure or eliminating “non-essential” positions. Better yet, let’s close some “unproductive” stores.

And obviously technology enables us to take away a bit of decision-making from the front-line staff. After all, human beings are notoriously misled by their own intuition. And whoever got fired for praying to the God of Efficiency?

And running all those different marketing campaigns adds a lot of complexity. It would be much easier to boil things down to just the major stuff that we know moves the dial.

And our product line is just too diverse. Sure it’s interesting to have something fresh and innovative, but doesn’t that just increase the risk of slowing down inventory turnover and increasing markdowns? Safe is smart right?

Of course, over time, the top-line stops growing and the only way we know how to drive profits is through cost-cutting.

Over time, we’re proud of our low average talk times, yet customers can’t speak to a human being and our Net Promoter Scores continue their inexorable decline.

Over time, our one-size-fits-all marketing is, at best, indistinguishable from the competition and, at worst, a dim signal amidst all the noise.

Over time, the sad reality is that all we sell is average products for average people and there’s no reason to pick us over the guy with the lowest price.

Sears, RadioShack and a host of others that are on a long inevitable march to the retail graveyard didn’t get trumped by a disruptive competitor that emerged out of nowhere. An oppressive government didn’t regulate them out of business. They weren’t crippled by a series of specious lawsuits or hobbled by natural disasters.

Usually the brands that become irrelevant have made hundreds of seemingly small decisions, over many years, that prioritized the short-term ahead of the long-term, the numbers instead of the customer, mass rather than personal, safe not remarkable.

And once they are gone, once their fate is sealed and their previously storied histories are part of the record, we’ll look back and realize it happened gradually, then suddenly.