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Seeing past the problem

By Mark Di Somma

By Mark Di Somma

Every transformation programme I have ever worked on has been set in motion by a problem. And in every case the issue that has galvinised action and that everyone is so focused on answering is not the real problem at all.

As Simon Sinek has observed, people intuitively deal with what they know before they deal with the things they don’t know or feel less comfortable dealing with. The easiest question, and the place most people start is “what?” They deal first with the symptoms they can see and quantify. And often they address them with a “how” that is equally familiar – the methodology they always use.

But while a particular problem may have set off the trip-wire, in reality that problem is probably a symptom of what’s really happened rather than the real cause.

It’s the prompt.

And just having a way to address that problem does not guarantee any quality of answer. It simply provides a process for everyone to map to.

Do you know the lovely story of Abraham Wald? His reasoning shows why what you think you see can be so misleading. The mathematician was called in to determine how to make bombers safer during the Second World War. Everyone agreed they needed more armour. But where? Armour is heavy. If you put it everywhere, the bombers would never get off the ground. The answer seemed obvious. Put the armour where the planes were being shot the most. So Wald went to work and sketched all the places where bombers returning from their runs were most shot up.

But then, in his analysis of the situation, Wald turned everything on its head. The areas of most apparent damage were not the problem, he concluded, because they appeared on planes that made it back. The real areas of vulnerability on a bomber were those areas that weren’t marked – because planes shot there were the ones that never made it home.

Wald’s wonderful insight was to resist the temptation to ask “what am I looking at?” and to ask instead “why can I see this?” It’s a reminder to all of us. As are the words of the philosopher Karl Popper who said, “Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.”

Here’s what I got out of both men’s approaches. The next time you’re grappling with a marketing issue, don’t focus on the symptom or the approach, focus on the situation. And don’t veer towards what you understand. Set a course for what truly isn’t making sense.

More reading

The strategy of radical beauty
Crunching on cacti
The contradictions of eyelashes and data

If there’s a transformation issue I can help you with, please contact me.

Shifting brand responsibility

By Mark Di Somma

By Mark Di Somma

Shifting brand responsibilityLet me make a suggestion to brand owners in the interests not just of transparency but of greater consumer belief. Stop communicating your efforts in sustainability, diversity, traceability, environmental contribution, fair trade etc as corporate social responsibility obligations. Instead, act on them, and account for them, as differentiating inclinations.

And frame those inclinations within a broader, singular superset: your brand’s distinctive sense of its responsibilities.

To that end, let’s stop talking about reporting. It smacks of obligation and compliance rather than commitments and contributions. And I would suggest, change the way your responsible actions are shared to make them more involving. Less paperwork, a wider range of sincere and honest conversations, with more people, across a broader range of platforms. In other words, make the discussions around how you behave ongoing, less formal and truly “social”.

Just so we’re clear, I’m not for one minute advocating that the activities identified above go unaccounted for. Quite the opposite. I am advocating a change in spirit. I am suggesting that the underlying question that has driven corporate social responsibility reporting for so long – What has [our corporate] done that could be deemed socially responsible? – is fundamentally, even cynically, flawed because businesses have been able to engage in behavioural offsetting: announcing and promoting their contributions to good at one level and, at the same time, masking or downplaying the damage they are doing elsewhere.

As consumer demand for brands to be genuinely and holistically responsible continues to climb, let me suggest two shifts:

A change of platform: from the Corporate section of the website to part of the ongoing dialogue on popular social media.

And, as part of that dialogue, a new set of questions to which answers are both given and sought:
1. Where do our responsibilities lie? (scope)
2. Who are we responsible to? (stakeholders)
3. What are we responsible for? (actions)
4. How responsible have we been? (analysis)
5. What can all of us take responsibility for helping to change? (community-sourced innovation)

Acknowledgements

Photo of the cover of a leaflet from Starbucks by Howard Lake, sourced from Flickr.

More reading:

Why are you waiting for things to improve? 10 ways for middle-market brands to tackle austerity now

By Mark Di Somma

10 ways for middle-market brands to tackle austerity nowBy Mark Di Somma

There’s nothing to suggest that the global “downturn” is about to upturn any time soon. We’re in the middle of a sustained bear and nothing in the economic news – America’s debt, China’s slowdown, the flat-footed European economy, Britain’s economic woes, commodity trends – suggests a sudden and universal change of fortunes.

Austerity is the normal. It’s not a market trend. It is the market.

And yet so many businesses say that they’re holding on and waiting for things to change for the better. Once the economy improves, we hear, they’ll be able to start growing again. That implies they do not see adaptation as their responsibility. They continue to apply the same models and mindsets that they have been applying. They are literally waiting for light to show its face at the end of the tunnel.

A better strategy would be to adjust to the tone of the times we now face. Too many brands are trying to sell to a market sentiment they hope for rather than one that realistically prevails. Setting aside the more obvious market strategies of bargain brands and luxury manufacturers, how do middle-market brands attract buyers and gain preference today?

Start by recognising the human factors:

Everyone still loves to be inspired. Excitement is a timeless sentiment especially in times of perceived bleakness. But the adrenalin rush of naked materialism is perhaps less appropriate today than the powerful sentiments of empowerment, hope and resilience. Materialism is increasingly seen as pre-GFC. People still want to believe. Human nature is to look forward. The key for brands will be how they tap into that in order to tie momentum and a realistic sense of progress to what they’re offering.

The familiar is even more important. In a world where change is trumpeted in the press, instability pushes many towards what they’ve known; the things that feel ‘proven’ to them. A recent survey by JWT, cited here, suggests the over-riding priorities for most people are health, time with family and control over their lives. People want to care, and they want to feel good about the things they care about. Tap that.

Rituals, habits and rewards have renewed significance. This is very much an extension of the previous point. People enjoy the familiarity and the immediacy of doing things they know, love doing and are comfortable doing with or alongside others – especially when they work in times that see them under increasing pressure. Rituals also suggest a renewed interest in planning, in thinking ahead and having things to look forward to. A beer at six is a habit. A family Christmas or a regular holiday is both a ritual and a reward. It requires thinking ahead to fulfil something that has a specific timeframe for all involved. Provide things for people to look forward to.

Local matters. Another extension of the above. Home-grown brands feel like “one of us”, are familiar, contribute to the wishes to build strong communities and to give back, and come with [unstated] implications of less risk. People draw strength and comfort from what happens in their vicinity.

People love a bargain, but not at any price. Research by Trajectory suggests that recession-sensitive consumers are more aware of price and less loyal (no surprises there), but still prefer brands that couple value with values. Brands need to be responsible, and to be seen to be responsible – in the broader sense of the word.

Now apply those insights to your strategies.

  1. Give people not just real hope, but a refreshed sense of hope. The hunt for happiness has shifted from what people own to what people have around them, but it’s still very much present.
  2. Raise their adrenalin rate.
  3. Give them more of what they know you for (or more particularly more of what they choose you for) – perhaps with a twist, perhaps not.
  4. Suggest [new] things to do that they will enjoy doing, or new ways of doing what they enjoy doing now.
  5. Give them new things to value but in ways that reflect what they want to value these days.
  6. Act responsibly – and call on others to do the same.
  7. Demonstrate that you ‘belong’ here (wherever ‘here’ is).
  8. Give buyers what they feel they can afford or deserve without making them feel cheap.
  9. Encourage them to think ahead by offering a pay-off for planning.
  10. Give them rewards that sincerely acknowledge the effort they’ve put in.

Combine to compete

None of these ideas is new. And one could well argue that no one idea will work by itself. Rather the competitive opportunity for your brand lies in how you develop your own mix of these sentiments to re-incline consumers to what you offer via what you are seen to stand for.

Be a provocative, exciting, proactive, responsible, relevant, practical, familiar, valuable and evolving presence in people’s lives. That’s always going to be a lot more interesting and competitive for your brand and to your customers than waiting for the world’s economists to start whistling a happier tune.

More of my thinking on market leadership here:

The strategy of radical beauty
Market leadership: you can’t lead as a brand if you follow another brand.

Looking for a speaker on this?

Market leadership is a topic I really enjoy speaking about. Get more details. Or sign up here and let me keep you up to speed with my presentations.

Acknowledgements:

Image of “Austerity ahead” road sign by 401(K) 2012, sourced from Flickr.

Actions and reactions: two very different drivers of market agility

By Mark Di Somma

Actions and reactions are a strange two-speed dance in the context of market agility. By Mark Di Somma

Actions and reactions are a strange two-speed dance in the context of market agility.

Reactions are the responses that competing companies must actually make together and in a co-ordinated manner to shifts in market dynamics and/or customer expectations. Doing so sets a new norm over which the participants themselves can then compete.

The airline industry generally, with the exception of the upper-market carriers, has reacted to economic pressures by dropping ticket prices and introducing fees for services. Shifting the emphasis from prestige to transport, and charging people for everything and the seat has reaped them billions. They did that together.

As this article on the resurgence of Hollywood ticket sales shows, movie-makers have responded to the surge in available content and home entertainment gadgets by delivering experiences that still make it worth their while for people to go out and see a movie at the theatre – action-packed franchises, amazing sound, 3D; features that continue to make cinemas the biggest and best way to see a movie. Again, they did that together.

Both sectors have looked to change the overall rules, meaning there’s now a new collective sector playbook that in itself generates new standards, new expectations, new reactions and perhaps new competitors.

Contrast that need for largely consentual change by an industry with the dynamics required to then take competitive actions within the new rules. Here the emphasis in sectors ranging from FMCG to technology is increasingly on first-to-market speed, initiative and rapid product prototyping leading to validation. As Frank Days points out in this interview, there’s an increasing push towards agile approaches. In fact, Day went so far recently as to suggest that “the marketing plan is dead”, saying he preferred thoughtful reflection and prioritisation to a more documented approach. His advice? “Think like a scientist. Generate new hypotheses and find rapid, low cost ways to test new ideas. This is where the breakthroughs come from.”

I’m fascinated by how these apparently contradictory ideas need to work together.

Without constant vigiliance and reaction, sectors are in danger of being overtaken, converged or devolved. Camera manufacturers, for example, face ongoing pressure from phone makers. If the industry as a whole does not react to that threat, the whole industry is in danger. So there is a need for collective attention to relevance.

Yet, ironically, while the new playbook is a necessity, it is also a false god because simply staying and moving within an evolved sector pack is not innovation. It is catch-up. It is meeting the new market normal. Failing to add value on top of that new normal quickly renders a brand replaceable. A camera manufacturer, for example, must distinctualise its offerings and brands within the photography sector itself, or face losing market share to higher-profile players or to outsiders offering camera capabilities.

In markets full of change, all change is not equal. Some changes that may appear radical advance everyone in the sector but change nothing competitively because, relatively speaking, the advantages don’t shift. Instead, the industry itself moves forward. Other changes, not even large changes, can see brands make significant gains against their competitors.

Increasingly, I categorise the differences between actions and reactions this way. Reactions are what everyone must do technically to adjust. Actions are what each brand must do to prove its worth over others.

Actions may speak louder than words, but actions and reactions are also judged by words. If you are introducing a change for your brand that amounts to a reaction, the change itself is not the hero – but it may be an opportunity to present change in a way that is different from how others have introduced it. And if the change you are introducing is an action, the action itself is as important for what it says about you as it is as a shift in what people expect.

One thing reactions and actions have in common. They both serve to evolve the market dynamics in which you compete. They add to how you are perceived. They add to the story you must tell and the conversations you must have.

Powerful brands always look for the humanity rather than the technicality in every change they announce, regardless of whether it is an action or a reaction.

They ask these three great questions:
1. What does this [action or reaction] tell our customers that they have been longing to hear?
2. What does it say about us that our competitors can’t say?
3. What does it say about us that we haven’t said before?

More of my thinking on this here:

How to make sure your company’s next strategy succeeds

Looking for a speaker on this?

Market agility and competitive value are topics I really enjoy speaking about. Get more details.  Or sign up here and let me keep you up to speed with my presentations.

Acknowledgments

Photo of couple tango-ing in the street by Ed Yourdon, sourced from Flickr

Other perspectives:

Pricing the ecosystem

By Mark Di Somma

Take a look at the diagram below courtesy of Ryan Jones (thanks for the point Marc Abraham). It shows how Apple spans its offerings over a surprisingly wide range of price points.

By introducing new lines, retaining older lines at degraded prices and through the use of provider subsidies, Apple delivers an impressive range of ‘step-in’ opportunities for customers to join its ecosystem.

apple-price-points

I’m intrigued by this because, from a brand point of view, these arrangements provide a powerful alternative to traditional “up-sell” approaches and to the discounting that brands so often use to make high-end products more available.

Apple’s approach enables the brand to retain its all-important brand equity whilst providing consumers with the means to address any price barrier in the way they feel most comfortable with. They can enter the Apple world uncommitted or very committed in terms of contracts, with a spec’d up or spec’d down product (which they will then be encouraged to upgrade/add to). Until I saw Ryan’s analysis, I hadn’t realised the sophistication and range of this strategy.

Some learnings:

Choice is not the same as access. In Ryan’s graph, Apple has used product, price, capacity and configuration to turn 3 lines into 25 different ways to buy. The choices shown here are simple: iPhone; iPod; and/or iPad. The technical features offer scope to pay more or less for each product without cannibalising the opportunity to invest in the other members of the family (where more choices are available). There’s always a way to buy what consumers want – and there’s always more to buy.

Consumers are buying the brand, but they are deciding on the user experience they want by how they buy. Apple and its service providers have carefully calibrated the user experience (in terms of things like speed) so that, day to day, consumers either pay for what they get or get what they pay for. Regardless, they do so without any compromise to the Apple brand integrity.

Price isn’t about price. It’s about quantifying commitment. Most brands ask for the sale. Apple, it seems to me, goes one step further, and uses price options to actually ask for the commitment on two levels. First of all, they ask consumers to commit to the product without any obligations and pay upfront for that freedom, or commit over time with obligations and defer the cost of doing so. Secondly, and more importantly, they want consumers to commit to more and more of Apple. The Apple ecosystem exists to make this happen. So they’re not just pricing each range so that it is versatile and defendable, they are using their full ecosystem (including all the products not mentioned here such as laptops and desktops) to actively enable one point or multi-point commitment.

People commit to what they enjoy – and the more enjoyment they get, the more likely they are to continue to commit. With apologies to Hotel California, people can step in any way they like, because Apple’s intention is to then make sure they never leave.

More reading:
How to make sure your company’s next strategy succeeds
Why innovation needs to engage, not just impress
Strategy: 11 ways to purposefully achieve growth
Know thy enemy
You can’t lead as a brand if you follow another brand

Further perspectives
Take A Lesson from Apple: A Strategy to Keep Customers in Your Ecosystem (forbes.com)

How to make sure your company’s next strategy succeeds

By Mark Di Somma

This fabulous article by Charles Roxburgh is a must read for every decision maker responsible for deciding the fate of a proposed strategy. It explores in fascinating detail how the brain tricks leaders into making “rational” decisions that are nothing of the sort. In fact, it reveals that all of us work to a set of biases that we must consciously resist.

While my recent post on Prussian cast iron medals addressed how behavioural economics can work to actively lift value and change perceptions for buyers, Roxburgh’s work is a sobering reminder that rogue decision making is alive and well. Much of what he describes in terms of European financial services is equally applicable to what happens in many other fields. In this post, I highlight Roxburgh’s key observations, his recommendations on how to address them, and the steps I look to take as a strategist to ensure that what I’m doing gets the fairest hearing it can from the decision makers I’m working with.

Settle in please for a longer-than-usual riff on how decision makers can fight the forces of human nature and lift the chances of strategic success:

1. Read the forecasts for any strategy’s outcomes with care. The chances of failure are much higher than we like to give them credit for. Optimism is built into our DNA as human beings, which is vital for creativity, but unless carefully controlled it tends to see even the most careful strategist inserting unrealistic stretch into plans in the sincere belief that such extremes can be achieved.

Roxburgh suggests:

  • Avoid presuming certainty or success.
  • Stress-test strategies under a range of two or four scenarios.
  • Add 20 to 25 percent more downside to the most pessimistic scenario and see what floats.
  • Build flexibility and options into your strategy to enable responsiveness either up or down.

What I also try and do:

Quantify the problem honestly even before you look for answers. Not just how big is the problem, but what are the implications of the problem and have they been addressed. Regular readers will know that I’m a huge believer in the Stockdale Paradox. To that end, I look to maximise the extent and gravity of a problem whilst always believing that there is a viable and positive answer. Being brutally frank about what needs to be tackled can make for some tense conversations and the optimists in the room will quickly label you as a pain the butt, but it’s absolutely vital to avoid drinking in the fairy dust.

It also tells you something that so often gets lost: how big the answer really needs to be based on what’s being tackled, not how big it’s allowed to be based on the budget that’s been assigned.

2. Invest money where it counts, not where it feels good. Richard Thaler’s principle of ‘mental accounting’ is that decision makers subconciously assign various levels of sexiness to different budgets and Roxburgh gives some great example of this in the article.

Roxburgh suggests:

  • Judge every call for investment consistently.
  • Don’t allow money to be reclassified so that it is then acceptable to spend.
  • Remember every dollar is worth a dollar, no matter what it’s spent on.

What I also try and do:

Keep the resources and the problem in the same frame the whole time. Make sure money is spent on the actual problem, and that the problem doesn’t become a reason for money to be spent on something everyone would prefer to be involved with. The very real temptation here is to pin the strategy on the problem: to assign an answer that everyone would like to see happen (and its accompanying resources) to a problem no-one wants to tackle head-on, in the belief that doing so will fix the problem or at least make it more palatable to deal with.

3. Recognise that status quo bias means people would rather ignore what’s really going on. Roxburgh explains that people would rather leave things as they are, that they are more concerned about the risk of loss than they are excited by the prospect of gain and that they often exhibit a strong desire to hang on to what they own because the very fact of owning makes whatever it is more valuable to the owner.

The results of this bias, according to Roxburgh, are that decision makers are reluctant to make big calls. “The challenge for strategists,” he observes, “is to distinguish between a status quo option that is genuinely the right course and one that feels deceptively safe because of an innate bias.”

Roxburgh suggests:

  • Be prepared to shed. View divestment not as a failure but as a healthy renewal of the corporate portfolio.
  • Be as rigorous in your analysis of what stays as what you want to change.

What I also try and do:

Know what you’re keeping and what you’re changing – and why. For me there are four key things to identify in discussions with decision makers around any strategic change programme:

  • What must we keep?
  • What could we keep?
  • What could we change?
  • What must we change?

Start with what must stay. In my world, for example, you absolutely want to retain the intrinsic goodness of a brand at every level, from goodwill to heritage to culture, and that’s usually where I start – with what a brand must keep in order to retain competitive value. For me, this more conservative approach of moving from the known to the unknown does give people anchors. It allows decision makers to use status quo bias to their advantage because a clear rationale for why some things are staying leads onto the tougher questions of what must be left behind.

4. Know that there’s no such thing as the foreseeable future. Anyone whose read “Black Swan” will understand the dangers that past patterns present in terms of predicting the future. However anchoring is a powerful human trait. It causes us to look ahead based on what we’ve already seen. Companies do this all the time in their expectations around performance. “What you did last year – plus X percent.” So often those numbers are arrived at with little or no context in terms of market dynamics. As Roxburgh says, and as readers of Nicholas Taleb will know, “Repeated studies have failed to show any statistical correlation between good past performance and future performance.”

Roxburgh suggests:

  • Continually question every assumption about where a market is heading
  • Don’t allow yourself to be swayed by “industry consensus”
  • If you are going to look at patterns, take a long historical perspective. Put trends in the context of the past 20 or 30 years, not the past 2 or 3.

What I also try and do:

Pinpoint the assumptions. Sounds straight-forward. Isn’t. If it’s difficult to know what we don’t know, it’s equally challenging to establish what we don’t question. Sometimes conventions and assumptions are so ingrained in ways of working that people fail to recognise them as fallible or even negotiable.

Look long for patterns – but judge how long by the dynamics of the sector. Some sectors evolve faster than others, meaning some have longer turn times while others shift gear much more quickly. What feels like a responsible timeframe to analyse trends in the finance markets (Roxburgh’s reference point) could be ridiculous in a sector like technology (which isn’t even 30 years old yet as a consumer sector).

5. Know where the exit is, and know when to leave. The sunk-cost effect sees companies continuing to throw money at a problem, long after it has passed economic viability, in a bid to salvage their investment and miraculously turn things around. No-one likes to admit they got it wrong, but knowing when to do so, and doing so decisively, is critical not just to saving resources but having resources available to adequately fund what replaces it.

I watch in despair as companies make “strategic” decisions to continue investing in products that have no hope of recouping that investment, never mind making a profit, because no-one is prepared to pull the plug. When the idea does fail, the blame somehow falls on “market conditions” and everyone puts on their best game face.

According to Roxburgh, sunk cost effect can be explained by loss aversion (companies would rather spend more than write off everything to date) and on anchoring (once the brain has been anchored to a budget, the additional budget doesn’t seem unreasonable).

He suggests:

  • Kill what can’t work – and do so as early as is reasonable.
  • Pursue several strategic options – taking a portfolio approach to your strategy allows you to go with what works and ditch what doesn’t rather than relying on one master plan.
  • Gate fund as a stop-loss mechanism – release follow-on funding for a strategy only once agreed targets are met.

What I also try and do:

Have a strong, future-set brand story. Set a very clear vision for what a brand will feel like and be acting like when the strategy succeeds. I do that through the formation of a brand story that looks ahead to how the brand should be three years from now. I have found such a document keeps everyone very focused on the outcome and quickly shows when things are going off-track from a perceptive/receptive point of view.

Back up the story with clear numbers. At Audacity, we look to put a measurement framework in place that quantifies the story in terms of how things should track across a range of agreed metrics. Doing this enables decision makers to plot how a brand is progressing and to take corrective actions if things go off-kilter.

The story plots sentiment. The measurement framework plots numbers.

6. Resist the urge to herd. This idea is little short of comfort-food for marketing decision makers, so we won’t dwell on this one. But Roxburgh makes one point here that is well worth noting: “Some actions may be necessary to match the competition … But these are not unique sources of strategic advantage, and finding such sources is what strategy is all about.”

I think a worrying mistake that decision makers make is that they assume that once they have signed off the strategy, it will deliver advantage for the foreseeable future. Not true of course. As VJ Govindarajan has pointed out many times, a strategy’s effectiveness starts to fade the moment it is created. Why? Because once it is made public, and proven to be successful, the herd will inevitably adopt. The strategies of today are the hygiene factors of tomorrow – and the transition time from distinctive to indistinguishable continues to shorten.

What I also try and do:

Find ways to distinctualise your brand that then force others to play by your rules. The company that drives successful change in a market decides successful change in a market. In the strategy, look for ways to define the market atmosphere that work in your favour, and that actively work against a competitor trying to do the same thing. My friend Keith Rushbrook has a great question that he asks a strategy team to get them to that point, “What can we be or do that our competitors can’t be or do, and if they try, that’ll work to our advantage?”

Apple is a past master at entering a market after the initial forays, changing the rules, and then getting everyone else to play catch-up. As I’ve said elsewhere, “The most powerful brand you can own and manage is one where you know and write the code – not one that takes its cues from where others are, or where you perceive them to be.” Conversely, if you are the brand that everyone takes its cues from, you get to play to your strengths and your agenda, and your competitors can only follow.

7. Less will change than you expect. Humans misestimate future hedonic states. In other words, people are bad at estimating how much pleasure or pain they will feel if their circumstances change dramatically. Roxburgh says that people adjust surprisingly quickly even to major change, and that their level of pleasure (hedonic state) ends up, broadly, where it was before. Even acts that at the time seem revolutionary and highly disruptive emotionally will soon become the new normal.

Equally, within a culture, ideas that trigger predictions that they will generate huge difference to the company or to its culture seldom have as big an impact as predicted. Outrageous is often just a synonym for ‘too early’. If everything else is right, the concern that ‘our people will find it hard to adjust’ has been proven time and again to be incorrect. Yes, people will have misgivings – initially anyway – but they will soon adapt to what’s required.

Roxburgh suggests:

  • Keep things in perspective.
  • Navigate the inevitable swings in emotion and morale as people adjust to change.

8. Remember that the strategist’s role is to counter-balance the consensus bias. Let them do that. But then challenge them back. Roxburgh says people tend to overestimate the extent to which others share their views, beliefs, and experiences. He gives four examples of the false-consensus effect:

  • Confirmation bias – the tendency to seek out opinions and facts that support our own beliefs and hypotheses
  • Selective recall – remembering only facts and experiences that reinforce our assumptions
  • Biased evaluation – accepting evidence that supports personal hypotheses, while rejecting  contradictory evidence.
  • Groupthink – simply agreeing with those around us

By way of examples, he quotes classic lines one might hear from a CEO working from a false consensus basis:

  • “the executive team is 100 percent behind the new strategy” (groupthink)
  • “the chairman and the board are fully supportive and they all agree with our strategy” (false consensus)
  • “I’ve heard only good things from dealers and customers about our new product range” (selective recall)

False consensus is pernicious, says Roxburgh, because it can lead strategists to miss important threats and to persist with doomed strategies.

He suggests:

  • Put all ideas up for review. Create a culture of open challenge and constructive debate within management teams where reviews are welcomed as helpful, not hostile, acts.
  • Seek out and debate contrary views so that they have been considered. Even establish a “challenger team” to identify the flaws.

Final thoughts

I agree wholeheartedly. Whilst it may be hard for strategists to have the ideas they have worked on so hard picked apart by colleagues, it’s much more dangerous to leave ideas unlitigated. Debate is healthy providing it remains focused on the business outcomes and everyone is committed to finding real answers and not simply looking to issue ‘restraining orders’.

To close, a thought for strategists taking part in these processes. It’s never easy being the ideas person. It requires sustained energy and confidence, and you won’t get everything right all of the time, but then, as Roxburgh shows, neither will those around you.

Lessons from an unnoticed violinist

By Mark Di Somma
English: Violinist Joshua Bell following a per...

Violinist Joshua Bell following a performance at the San Francisco Symphony in California. (Photo credit: Wikipedia)

I’ve always loved the story of Joshua Bell playing the Bach pieces largely unnoticed in the Washington metro station. Please watch the video if you don’t know the story. And while the experiment does indeed confirm that we don’t take the time to appreciate as much as we should, more particularly, it’s also a poignant example of the contributions of context and information to our everyday decision making.

Context provides so much of how we read situations. No-one expects to see a concert violinist playing at a station – and because no-one expects it, no-one notices what he is doing, regardless of the extraordinary quality, and even fewer reward it. In that setting, in the blink of an eye that people evaluate, he’s just another musician, just another busker. If he was that good, many people would have subconsciously thought, he wouldn’t be playing here. So if he had played in another setting, even if it wasn’t a concert hall, would that have given his performance greater credibility for those passing by? Quite possibly.

There’s always competition. Whether you win or not depends on your ability to flourish in the prevalent operating conditions. In a concert hall, Mr Bell stands head and shoulders above most. In that context, he is at the top of his game. But in the context of a metro station, Mr Bell was uncompetitive. That is absolutely no reflection on his immense talents. The operating environment in a metro station is centred around time. The driving dynamic is rush. Mr Bell’s requirement that in order to appreciate what he was playing one had to pause for a moment and pay attention was incompatible with the environment and with the dynamic of that particular environment at that time of day. The destinational impulse of commuters completely overrode their cultural impulse. One could well say that was to their cost – but in reality, most clearly didn’t care.

What you make is actually less important than what you market. I wonder if it would have made any difference if Mr Bell had played alongside a sign that provided his credentials? Because then the perceptive dynamic would have changed markedly – from “another busker” to “free concert by an international musician”. Without information, without “marketing” most people, most companies and most brands are just anyone to everyone else. Mr Bell makes some of the sweetest and most skilfully played music in the world, but until people can see why someone like him deserves attention, he won’t gain most people’s interest or time. Today, everyone, including consumers, starts with “No”. It’s their fastest and simplest filter.

For every marketer who has felt like Mr Bell must have felt that day, three questions to ponder on:

1. Does the context in which people see what you offer provide the right signals – or does it telegraph all the wrong things about you?

2. What is the most powerful dynamic for buyers in your sector – and how are you addressing that in ways that make you the best answer?

3. In your marketing communications, have you really told people what they need to hear in order to say “yes” to you?

From Prussia with love

By Mark Di Somma

Jeremy referred me to this fabulous presentation by Rory Sutherland, and it’s another corker from the man from Ogilvy’s. Mr Sutherland would absolutely make my short list of people to sit next to at dinner. Not only is he an adamant supporter of one of my favourite disciplines, behavioural economics, but his talks are peppered with the most wonderful references and observations.

In this speech, he gives a wonderful example of how physical value can be transformed into an intangible value that defies costs, but only if the associations are powerful and valued enough. Examples abound of this dynamic working the other way (items being sold for, or even below cost) but the Prussian medal example Sutherland gives is proof that cast iron can indeed be worth more than gold if the story that surrounds the lesser metal gives it greater value, and providing of course that those seeing the cast iron medal also understand the context of why it carries the value it does.

Sutherland goes on to direct this argument at the environmental movement. The secret to changing how people drive, he suggests, is not to get them to drive less but to encourage them to revalue in sufficient numbers what they drive. In other words, make it feel worth more, status-wise, amongst the driving population to rent a small car than drive a big car – even though the bigger car has intrinsically more value.

The science of the age, he suggests is getting to grips with how and why people behave the ways they do, because the only ways to bring about meaningful change are to provide people with reasons that make sense for them. Those last two words here are key. The reasons don’t have to make sense logically – but they absolutely must make sense behaviourally. They must compel a different way of acting.

And while everyone loves to think big, Sutherland continues, more and more as marketers we should dare to be trivial, because “quite a lot of human behaviour is predicated on very small signals”. The examples he gives of the $300 million website button and the carmaker trade-in arrangement that reaped another 20,000 sales reveal why there is value beyond all proportion in being able to identify and transmit those signals.

Key take-outs for me:

In order to change the value, you must change the context within which that value is judged. In the case of the Prussians, post-war gold was worth less than post-war cast iron because of what a cast iron medal had come to represent.

Value is aligned to mass. Enough people must agree between themselves that the value has changed in order for that idea to take hold and gain recognition.

Together context and perceived value can ‘rationalise’ a change in how an item is viewed even if the item itself hasn’t altered. When that change is downward, of course, we refer to it as commoditisation. What Sutherland shows is that it can also work in reverse, if, if there is enough critical mass.

Behaviours are prompted by signals. The bigger the change in behaviour, the more human, and therefore “trivial”, the signal should be. The value that such signals can generate has the potential to be completely out of proportion to what appears to have changed.

Sutherland’s talk prompts me to hypothesise that any discussion around changing perceived value should probably hinge on three questions:

1. What’s the context that we need to change?

2. What do we want people to say to each other in order to change the value?

3. What’s the smallest and simplest behavioural signal we can identify to trigger this change?

More reading

The strategy of radical beauty
The death of demographics. Does it matter?
Maintaining brand loyalty: 4 ways brands get it wrong
Brand dynamics: the shapeshifting of brand likeability

Further perspectives

Sustainability: Being good, not just doing good

By Mark Di Somma

Historically, corporate social responsibility has put the emphasis on how businesses are doing good. It’s become an increasingly varied checklist of “things we’ve done right”. Today though, socially aware audiences want more. They increasingly make judgments about you based on your overall likeability. They want to do business with brands that are good.

And that in turn means that, at a social level, your reputation depends less on your ability to simply highlight good works done in isolation (through community activities or sponsorships for example), and much more on your ability to show that you are inherently principled in your dealings and that you behave consistently across your organisation in ways that align with your social and commercial reputation.

That shift in the significance of social actions has a downstream effect on critical social initiatives such as sustainability. In my opinion, they should no longer be seen as nice-to-haves or even as opportunities to improve efficiencies across your supply chain. Rather, the actions you take in these areas are competitive opportunities to distinguish your company from others. Your social actions help define and demonstrate your ‘moral compass’ – and in positioning you as transparent, consistent, reliable and principled, they add value to dealing with you. They also help swing the dialogue, and therefore the consideration set, away from just price.

People like good brands. They trust them. They believe them. They see value in them. They see them as the counter to unethical behaviours. Subconciously, they look for opportunities to favour them. For those reasons, good brands carry lower “social risk”. They are less likely to draw adverse reaction, less likely to make the news for all the wrong reasons, much less likely to have their actions and motivations questioned.

But – and it’s a very important but – your social actions will only work to reinforce your standing as a business that is good to do business with if they are communicated in ways that directly link how you act with what customers can expect. With sustainability now treated virtually as a compliance matter in so many B2B exchanges, and expected by customers as part of how business is now done, the temptation, as I alluded to earlier, is to rattle off a list of “social” achievements and consider the boxes ticked. That in my view is an opportunity wasted. Rather than treating your sustainability actions as a list of initiatives, I suggest you look to present what you are doing as intrinsic social proof for why you deserve preference; for why you’ve earned the status of “a good brand” amongst the people who buy from you.

Take a food company with a sincere commitment to deep traceability in its supply chain. The temptation is to report on where ingredients were sourced and perhaps to elaborate on what standards were met. Such a description explains how the company approaches sustainability but does not do full justice to its actions. The real opportunity lies in explaining why the business went looking for such alternative sourcing in the first place and how that commitment aligns with their wider motivations to do the right thing. In other words, if you are that food company, don’t just tell your customers that you buy ethically. Tell them why you buy ethically, why your ethical stance is unique, how that aligns with the real actions that need to be taken, and what that says about your brand more broadly. Traceability should be aligned with the business’s worldview.

Two thoughts to close:

1. If you are investing in social actions such as traceability, diversity and sustainability, do so because they fit with who you are, and be proud of that. Make them an intrinsic expression of your DNA, not just something you do to fit in alongside everyone else.

2. If you’re concerned that you haven’t taken full competitive advantage of these actions, try testing the market effectiveness of your actions with some searching lines of enquiry. In the case of your sustainability story, consider this question, asked from the point of view of your customers: “When we bought from you – what changed in the world, how did you make that happen, why does that matter to me, and why will buying from you ensure things continue to improve?”

Your responses, told well, can certainly form part of the proof that you are better, in every sense, than your competitors.

More reading

Time to rethink the business model of some NGO brands?
The portfolio approach to strategy
The power of being purposeful

Other perspectives