Revolution Not Required
Articles April 8, 2024 Chuck Wall “You say you want a revolution Well, you know We all want to change the world.” —The Beatles In 1968 The Beatles challenged a generation with their rallying cry to become revolutionaries. And change it, we did. The best and brightest created breakthrough technologies to extend human life, increased mobility and connected every corner of the planet. Some might question whether this progress is all it’s cracked up to be. Technology hasn’t eliminated war, hunger, corruption, and many other kinds of human suffering. But, even if you wanted to escape back to the good old days, you cannot. And for those of us who selected the path of business for careers, we must manage—and grow–in this perfect storm of disruption. The velocity of business change can be mind-numbing as we try to keep our feet firmly planted while effectively competing in a global marketplace. During the forty plus year period since “Revolution” was released, we have also witnessed the rise of the management consulting and business school guru world. These experts have also told us all that we must adopt revolutionary strategies and tactics to succeed and profitably grow. From Total Quality Management to Six Sigma, the best and brightest our B-schools have churned out assured us that if we radically shifted our thinking, our leadership styles and adopted revolutionary best practices to wring every drop of cost out of our companies that we would cut our way to success. Now, the gurus continue to build a Tower of Business Babble filled with acronyms, metaphors, and black boxes to create new language and layers of complexity around the subject of how to grow a business. (Mainly they seem to have grown their own.) How many times have you asked yourself, “they don’t really believe all that BS do they?” After 38 years of day-to-day marketplace experience, I now believe we have been wrong about a lot of this, particularly the idea that we need to launch a revolution to win. What are my qualifications to differ with so many esteemed experts? I am neither a guru nor an academic. I am a businessman who has had the privilege of launching six companies of my own, while advising countless other entrepreneurs along the way. In my career, my clients have been companies of every size, from start-ups to Fortune 500’s. I have also studied and practiced Blue Ocean Strategy since it’s early appearance in the late 1990s. Most importantly, I have interviewed well thousands of real-world customers across twenty plus industries to understand what makes them tick. What do they think is missing in current products, services, and experiences? Plenty. Is there room for improvement? Absolutely. Based upon my collective experience, I strongly believe that starting a revolution is not required to succeed in today’s business climate. Revolutions are bloody, risky and can be disruptive to the enterprise. There is a much better way. Let me tell you about it. The battle between what is and what if Your most important job is to create and multiply customers every day. This cannot be subbed out to the marketing department or an ad agency. Profitable growth, one customer at a time, must be championed from the top. So, why is growth so hard to come by? Every company really operates in parallel universes: the “what is company” and the “what if company”. Running the “what is” side has never been more complicated and stressful given the market conditions today. The global economy now affects virtually every area of business. All of us realize we put our enterprises at tremendous peril if we ignore this truth. Inevitably, the “what is” company drains our resources, intellectual capacity and saps our strength. Truth is, many of us are just plain tired of “what is.” On the other hand, the “what if” company represents the future state of the enterprise. This is the proverbial “Blue Ocean”, where innovation thrives creating new products, services and experiences that create measurable market power and boatloads of profit. The “what if” company is energizing, fun and a great place to work. It is also rare. “What if” gets short shrift because most of our efforts are marshaled against “what is”. The result is that the possibilities of a brighter future are left to chance and the vagaries of the market. Or if you have stuck your toe into innovation, you were not prepared for how to balance the what is and what if worlds. This battle between what is and what if goes on in every organization. In his book, “The Game Changer”, A.G. Lafley, former CEO of Procter, and Gamble, clearly described the situation he inherited in 2000 when he took over the company. “Stretch, innovation and speed were the orders of the day. Stretch for higher goals. Innovate in all we do. Go fast. Take more risk. All of these are good things in and among themselves. In hindsight, though, we were trying to change too much, too fast. Many of our businesses were in no shape to stretch. Too many new products, businesses and organization initiatives were being pushed into the market before they were ready. Execution suffered, as we too often fired before aiming. We had to come to grips with reality, to see things as they were, not as we wanted them to be.” There was good reason for P&G’s headfirst plunge into innovation: they must produce the equivalent of a new Fortune 500 company every year…just to stay even. Think you’ve got problems now? Just imagine if you had to grow at a rate of $4 billion a year. But just because you are big, doesn’t necessarily mean you will succeed. Lafley teaches us an invaluable lesson when he explains that job #1 was putting the customer at the center of “everything we do”. In a Harris study of over 300 companies, 95% said innovation is “extremely or
Advertising Still Works. Consistent Advertising Still Works Better.
Articles April 8, 2024 Chuck Wall A fair amount of my career has been spent practicing the dark arts of advertising. These are the supernatural laws of persuasion designed a very long time ago by some suave and mysterious wizard in a cave with a name like Merlin McCann, Gandalf Olgivy or Dumbledore Draper. Legend has it that with the right mixture of a few secret ingredients, new customers will pop out of thin air and will live happily ever after. Back in the 1990’s it became more fashionable to describe advertising as marketing because it sounded more sophisticated. Of course, most creative types weren’t particularly well schooled in the other functions of marketing except making ads. Academics more eagerly embraced it and fit it into frameworks, strategies and methodologies. As we entered the 21st century, marketing as a term of art became passé and we became brand masters. The word brand was sticky, meaning it stuck to everything like gum to a shoe. I still cringe whenever I hear politicians using the word to attack their opponents as in “The Republican brand is tarnished.” Now, we live in the digital age. With the infusion of technology and the Internet, the old Draper magic has definitely evolved into something new. Or has it? The secret to growing your business (or brand if you prefer), is to connect with the potential customer at a deeper, emotional level. And the easiest way to do that is for them to like you. (Now you can fire your agency if you like because that’s the simple truth.) In dealing with many advertisers over the years, there is usually one overriding area of conflict when attempting to sell a client on a new, creative campaign. Generally the client will say, “Now I’m not an advertising expert but,” and then they start to lay out a rational set of factoids they believe the customer only needs to hear a few times to win them over forever. The conflict arises when the ad-marketing-brand-digital guy tries to explain another simple truth: people are practical creatures, but most often buy out of emotion. I know of what I speak, because I have had many of those client conversations and talked to thousands of the Edwards of the world. I have worked with insurance clients for many years. In one case, I was testing a variety of insurance television commercials with customers throughout the country. My research director had added a new spot on the test reel from Geico that featured the now famous talking gecko. Geico’s agency, The Martin Agency, had created the little animated character out of necessity; there was a Screen Actors Guild strike. It was supposed to name associate Geico and gecko. Martin Agency creative wizard Steve Bassett found that many customers mispronounced the brand name as “gecko.” The agency and the client hoped they would strike gold with visual/verbal mnemonic that would be a lot less expensive than paying an actor. As I saw it, the problem was, no one in my focus groups even knew the word gecko so the connection was lost on them. I only found two people out of forty who knew the word gecko. They thought the character was as one person put it “a limey lizard.” My report to my client (who competed against Geico) simply said that the gecko was no threat and that I hoped the agency would keep using “the little green character no one even understand.” Big mistake. What I had missed in the deeply conservative category of insurance was a break-out moment. Martin’s client got it while the entire industry, including my own, didn’t. The agency rejected what I like to call “ FF and L” (facts, figures and legacy) advertising usually preferred by financial services advertisers. Think of the typical “eighty billion strong and serving drivers since 1932” message. Geico was not focused on the sort term. Since Warren Buffet had bought the remaining shares in 1995 (Berkshire-Hathaway had owned a minority interest since 1975), the company was playing for keeps. Auto insurance is a very low interest category. People are mandated to buy by the state and their bank if they owe money on their car. The only time you see any value to paying your monthly premium check if an inherently negative experience: an accident or loss of some type. They see auto insurance carriers as commodities with little difference between the brands. They often worry that switching to another carrier may cause them to lose valuable discounts. In the end, there has traditionally been a very low emotional connection to insurance companies. Geico decided to compete on one benefit only – low price. But it is hard to win people’s hearts with only a rational benefit like savings. To win at this game they decided it was critical to entertain their prospects while always embedding a simple price message of saving 15% in 15 minutes. That basic tagline has been used continuously since 1994 in one way or another. The emotional connection Geico has made with their customers has worked. The combined campaigns have increased Geico’s market share from in the late 1990’s 2% to 14% today. They have become the third largest auto insurer in the country. Brands reach a cult like status when their advertising enters the popular culture. A few years ago, on a very delayed flight out of Atlanta, my pilot tried to make us smile when he announced, “Folks, we’re now 20th in line for takeoff. But I have some good news. I just saved a bunch of money on my car insurance by switching to GEICO!” Another widely quoted line was “So easy a caveman could do it”. Geico has stuck with this winning formula. Often called “The Ultimate Client”, every ad agency is envious of the budget and the freedom Martin has been given to stay with a direction long enough to see dramatic results. Over the past twenty
