Pricing & Promotions, Range & Portfolio, Shopper Communication, Knowledge Bank Blog, Category Strategy

Despite or Because

Are you succeeding despite or because of what you are doing?

Let’s start this week by talking about 2 people.

First, Richard Branson.  He founded the Virgin group, which controls more than 400 companies.  His estimated net worth is $5.1 billion.  He has dyslexia.

Second, James Dyson.  He founded the Dyson Company.  His estimated net worth is $5.7 billion.  He created thousands of failed prototypes.  Then failed to sell to his final design to major manufacturers.

If you read profiles of these guys you will often encounter the same word.  That word is ‘despite’.  Richard Branson succeeded ‘despite’ his dyslexia.  James Dyson succeeded ‘despite’ creating thousands of failed prototypes.

However, if you listen to them tell their story, you will often hear them use a different word.  That word is ‘because’.

Richard Branson says that one of the reasons he succeeded is because he is dyslexic – “the reason that I think people who are dyslexic seem to do so well in life, having struggled at school, is that we tend to simplify things”.

James Dyson says that he is successful because he failed so much – “I made 5,127 prototypes of my vacuum before I got it right.  There were 5,126 failures.  But I learned from each one.  That’s how I came up with a solution.

Why are we talking about this?  Well, we find ourselves regularly asking the question – do companies sell stuff because of what they do or despite what they do?  The natural tendency is to assume that the things we do – annual planning, strategy documents, NPD launch plans, communication – are net contributors.  It is because we do these things that we get more sales, right?  But is that really true?

We often think that many companies sell stuff despite some of the things they do.  Take annual planning.  This is often a heavy process.  There are lots of data inputs, lots of working sessions, lots of templates, lots of people involved.  Often this leads to a handful of issues and opportunities that most people knew from the start.  The objective of the process can seem to be to survive it.  We’d argue that many companies sell stuff despite this process not because of it.

You can think about most of your activities in this way.  Are they net contributors or are they net detractors?  Do we sell stuff because of them or despite them?

So, how can you figure out whether something is a ‘despite’ or a ‘because’?

Take Strategy Documents.  Have a look at your current category strategy.  How long is it?  How much data is in it?  How clear is the story you are telling?  How many actions do you have in it?  Are people internally and externally likely to understand and, most importantly, remember it?  In our experience many companies sell stuff despite their category strategies.  They are too long.  They are overloaded with data.  They don’t tell a clear enough story.  They have a long shopping list of actions.  Category Strategies should be a ‘because’ – a short, insight based story with a clear set of directive actions.  Is your strategy a ‘despite’ or a ‘because’?

Take the Innovation Process.  Have a look at your current innovation process.  How many stage gates are there?  How much research testing goes on?  How different does the product you launch look from the original idea?  We often find the innovation process is about getting products through each stage, getting people on board.  To do this you often need to de-risk the product.  And the more you de-risk, the less differentiation you deliver in the market.  If the innovation succeeds it is often despite the process not because of it.  Is your process a ‘despite’ or a ‘because’?

Take Portfolio & Range.  Have a look at your portfolio and range.  How many different brands do you have?  How many different needs are you trying to meet?  How many different product types?  How many different SKUs?  The predominant thinking seems to be the more you have, the more shelf space you have, the more visibility you have.  This is true…to an extent.  However, the more you have, the more resources get spread across the portfolio.  The more complexity there is for shoppers and retailers to deal with.  Is your portfolio and range a ‘despite’ or a ‘because’?

Take Proposition & Communication.  Have a look at the proposition of each of your brands or products.  How clear is it?  Would shoppers be able to accurately describe it in a single sentence?  Could you?  What about communication?  Are ATL, POS, Pack communication all reinforcing what you want your brand to stand for?  Is there a seamless consistency between them?  Often we see a disconnection.  The ATL communication is saying a different thing to the in-store communication.  The communication looks different.  Is your communication a ‘despite’ or a ‘because’?

We see an interesting trend.  In big companies there is more process, there is more de-risking of innovation, there is a wider portfolio, and more communication developed.  Often big companies succeed despite many of the things they do.

Whereas in smaller companies there is little process, you have to take risks, you have a tight range and you have limited communication.  This focuses your attention.  These companies often succeed because of what they do.

Branson and Dyson (and many others) turned a ‘despite’ into a ‘because’.  Can you?

Feel free to forward.  Have a great weekend and speak to you next week.