I often say that the best businesses are generic in every way but one. In amongst a framework of safe and recognisable best practice, they have a single disarming insight which subverts the status quo, and from which all their leverage stems.
In my case, although I dress everything up to appear distinctive, there really is only one thing I offer which I think is truly different, and that is this:
Treating business as a holistic whole, rather than a collection of parts.
On the face of it this is just common sense, but it’s not really how most organisations approach things. Instead they divide themselves into departments, which makes sense operationally, but at the same time it subtly conditions them into operating in a compartmentalised fashion. Each part of the business behaves semi-independently, rather than as one, thus sacrificing the coherence that is required to create a truly powerful market presence.
For the most basic example of this, consider the relationship between product and brand. From the consumer’s perspective these are one piece. They aren’t divisible at all. The product is a bigger driver of “brand” than the bits we label as brand; and equally the brandy bits shape the experience of the product.
As a result, the two should be worked on together. Simultaneously. And yet does that happen? Do rebrand projects tackle product? And does product development make us ask questions of brand? Typically not.
The role of a strategy – and the vacuum that sits at the heart of most businesses – is to be the glue that binds such pieces together. The animating force that turns many into one.
Now I know when I put it like that, it sounds rather easy. But clearly it isn’t, otherwise everyone would be doing it. So we should ask, what stops businesses operating in such a holistic fashion?
One answer I think is this:
A failure to address both the functional and the emotional at the strategic level.
To understand what I mean, think about it like this. Every business has a functional aspect: the hard, objective “task” that it performs which others don’t. And then equally it has an emotional aspect: the way it makes people feel, and the associations it has. For sake of simplicity (although this is a bit reductive) we can roughly divide these between product and brand:
Product = functional offering
Brand = emotional offering
Now most brands are good at one of these, but not both. Either they have a fantastic rational offer which negates the need for any emotional play. Or they have sufficiently artful presentation which negates the fact that they are totally generic and undifferentiated on a functional level.
In each of these cases the businesses fail to unify because their strategy only deals with one half of the equation – if they even have one.
(Naturally all businesses try to address the emotional aspect when they get to their brand work, but this is different from having it embedded into their overall strategy, and so doesn’t have the chance to guide the whole)
By comparison brands who manage to operate holistically have strategies which contain both the emotional and functional within them. They have what I call “strategic unity”; style and substance rolled together into one.
For a very basic example of a business which transitioned from being purely functional to strategic unity, consider Walmart.
For years they were strategically one dimensional, focusing on low prices and nothing else. Naturally this provided a compelling rational reason for people to shop there, and it worked pretty well, but always remained vulnerable to erosion by more emotionally seductive competitors. Sure enough one eventually emerged in the shape of Target – a similar enough deal, but a little more premium and aspirational, and thus somewhere people wanted to shop, rather than simply feeling like they ought to shop there.
Walmart dealt with this by establishing an emotional offering to pair with their functional one. It wasn’t complicated: basically they recognised that the pay off for hard working families who shopped somewhere crappy like Walmart was additional savings which they could put towards more exciting and rewarding activities. They summarised this as “helping families save money so they can live better”.
Notice that though it seems a bit bland at first glance, there’s something quite profound in this statement. It frames the job of Walmart not in the context of being a retailer (that’s incidental), but rather in the context of being a “money saving service”. This reframing not only carries obvious advantages on the touchy-feely comms side of the business (ads and the like), but on the functional side too – e.g. by helping families calculate how much they’re saving, stuff like that.
Through this example we can understand the formula for a strategy with such unity:
Only this business offers [functional offering], which enables [emotional impact] for our customers.
Naturally you won’t always be able to write it in exactly that format, but it gives you key idea: that there must be always be a real, hard, objective functional difference you’re delivering, and that that difference must in turn yield some sort of sexy emotional output for the punters.
Recognise that the emotional part isn’t always going to take the form of a “benefit” or a “feeling”. It could just as easily be delivered by linking yourself to a particular cultural group. “Only this business offers [functional offering] which is useful for [a particular sub culture]”. That’s basically what Red Bull do – there’s no “emotional benefit”, just a cool sub culture to whom the functional offer is directed.
Another possibility is that you might bring a certain emotional / fun / sexy vibe to a category that lacks it. “Only this business delivers [emotional characteristic] to this category, via [functional offering]”. In this instance the emotional characteristic obviously has to be something people find intrinsically exciting – like Tesla bringing performance to electric cars, or Method bringing beauty to cleaning products. Performance and beauty have emotional appeal built in; they don’t necessarily need to spell out the “benefits”.
You can see therefore that there isn’t a totally reliable template for this game (there never is and don’t let people tell you otherwise), but there is a clear principle. You must be able to clearly point out:
- What do you do differently on a functional level
- And what ownable emotional angle this delivers to the category
All strategies I develop marry the functional and emotional and embed them at the highest level of the organisation. Above product, above brand, above operations – but as the force that brings them into unity.
If you wanted you could split the two up, and call the functional part the “business strategy”, and the emotional part the “brand strategy”, but this would prevent you from embedding creative, emotional, branded behaviour into the functional parts of the business – somewhat undermining the point of strategic unity.
In conclusion, I guess this is why the legendary founders – Jobs, Musk, Chouinard and their ilk – all have artistic sensibilities. They are “creatives” put into strategic managerial roles. And thus they end up embedding the emotional without even having to think about it.
You and I, maybe we do need to think about it. But that’s not a problem, so long as we get it done.