Your Brand in Tatters

Your Brand in Tatters: Politics, industry, and decline versus vulnerability, by Mark Chussil

You delicately balance dignity, defiance, and desperation with your storied brand in tatters. You address customer dissatisfaction by appealing to emotion and evoking hallowed names from the past. You offer cheap financing and gifts as you race to reduce your product’s growing cost of ownership. You retrench, relying more and more on your most-loyal customers. You reassure prospective buyers as they question whether you’ll be able to provide service in the future. You watch implacable competitors advancing into areas once considered your safe haven.

Am I talking about GM or the McCain/Palin campaign?

(One thing I am not talking about is product quality. This post is not about the virtues and vices of cars or candidates; it is about strategic thinking.)

Whether we’re talking about the troubles of the Detroit Three or the Republican Two, it’s easy to blame the perfect storm of energy prices, financial crisis, and tough competition. But although the perfect storm may have accelerated their decline, it didn’t cause their vulnerability. Their vulnerability is the culmination of many years of decision-making.

Note that the decision-makers were not stupid and their decisions were not intended to cause vulnerability. On the contrary, the decision-makers were intelligent and they intended to build success. Yet vulnerability was the result, and it was not inevitable.

It’s worth thinking about how intelligent people get into such messes because lessons from their decisions can help you make better decisions. Some relevant issues:

  • Forgetting what it means to be an upstart. Summary: incumbents have (or can have) all the advantages; upstarts win by thinking differently.
  • Shifting (probably unconsciously) from “investment” to “budget.” Summary: budgets encourage financial thinking, investment encourages strategic thinking.
  • Basing a false sense of security on past success. Summary: we conclude that a strategy is working when we like the results, and we assume we’ll like future results if we continue the strategy.
  • Believing that a solution (or even the identity of the problem) is obvious. Summary: the solution to global warming is not to turn up the air conditioning.
  • Failing to distinguish trimming fat from cutting muscle. Summary: we can only buy success for a short time.

Note that all of those issues concern ways of thinking and none of those issues is limited to a specific factoid, event, or industry.

Most important, note that none of those issues can be solved by a quick fix. For instance, appeals to zero-percent financing and patriotism are ultimately hollow. They’re not hollow because people don’t care about cost or country. They’re hollow because they are designed to solve the seller’s problem, not the buyer’s. Discounts move surplus (the seller’s problem) when not enough people want to buy a company’s product. Waving the flag buffs up public image (the seller’s problem) when not enough people want to buy a candidate’s policies.

It’s also worth thinking about how to get out of the mess. As I’ve seen while conducting numerous business war games in numerous industries on six continents, strategists almost always have more options, and better options, than they think. The trick is to discover the options and to act on them.

  • First, acknowledge that we have a problem. That can be harder than it sounds, especially if you believe that evidence from previous strategies predicts all will be well. There is no substitute for healthy skepticism, basic numeracy, and what-if thinking.
  • Second, consider whether the core problem is really what you initially or traditionally think. Look at new metrics: for instance, if you rely on financial spreadsheets, look at competitive intelligence or customer interviews. Ask deeper questions: for instance, if you solve the problem as you plan, would that really make things better? Beware of hidden bias: asking your customers whether they’re satisfied with you may tell you little about whether competitors’ customers will switch to you.
  • Third, put on someone else’s hat, wear someone else’s shoes, look through someone else’s glasses. (Not literally, unless they agree.) The magic of business war games is that people see what the world look like from different perspectives, and especially from the perspective of competitors who want to win. Assume that the someone-else is intelligent, and ask why they think it smart to do something that looks not-smart when you’re wearing your hat, shoes, and glasses.
  • Fourth, stress-test your ideas in a safe environment before you risk your business or campaign in real life. Focus groups. Mock debates. Business war games. Strategy and crisis simulations. Test markets. Ask what could go wrong and answer it rigorously. Think through what has to happen for your strategy to succeed, and whether you really believe those things will happen.

Those recommendations are not rocket science. Nonetheless, the analyses I hear and the articles I read suggest that they’re not accepted science. There’s one action you can take that will 1) demonstrate that it’s not accepted science and 2) help immunize you against the traps: Listen critically.

Let’s remember that people don’t only fail; they succeed, too. Asking how-not-to-fail questions yields one view of your options, one perhaps focused on denial and desperation. Asking how-to-succeed questions yields a different view of your options, one probably focused on opportunity and exploiting competitors’ denial and desperation. It is easier to stand out when others are pulling back.

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