We all like to read—and write—about success stories. But you can learn just as much from looking at what businesses do wrong. And believe us, when it comes to examples, the failures are much more fun than the successes. Here are three ways we see companies get outpaced, outmanoeuvred and overwhelmed.
React too slowly
Business agility is a hot topic. From all the hype around technologies like cloud computing, you’d be forgiven for thinking the whole business community was previously knee-deep in treacle, but agility isn’t new. My favourite example is from the fifties. Readers Digest set out to prove that low-tar cigarettes were just as bad for you as any other. It commissioned rigorous testing, and found that there was practically no difference between any of the major brands. But Old Gold came bottom of the list, and it quickly seized on this and launched a big advertising campaign. By the time the ‘cease and desist’ order came through from Readers Digest, Old Gold had already milked the opportunity to market itself as the healthiest cigarette available. Not the most reputable example, but it does show that acting quickly is important.
There are lots of recent examples of companies getting it wrong by being out of touch with their customers’ emerging needs, and their competitors’ emerging technologies: Kodak (which missed the rise of digital cameras), Blockbuster (which failed to spot rental-by-post) and Nokia (which got blindsided by competitors’ UX advances)… to name just a few. Microsoft is an interesting example. It can be genuinely innovative—just look at Kinect and Lightspace. But Windows is a ‘me too’ offering and both Kin and Zune were catastrophes—far too little, far too late. Microsoft spent more on R&D in 2010 than Apple spent in the last decade. Whose growth trajectory would you rather have?
Always play it safe
There’s an old saying that nobody ever got fired for buying IBM. But while this kept ‘big blue’ in the black, it also discouraged IBM from taking risks. Its brand was so valuable that it couldn’t do anything that might jeopardise it. But when it comes to marketing, breaking convention can be a very effective strategy. Instead of taking on the big brands on their home turf, ice-cream-maker Antonio Fedirici courted controversy with its immaculately conceived ads. It has received far more publicity than its relatively small budget could have delivered with a ‘safe’ approach, much as Benetton did in the early nineties and Agent Provocateur did in 2007 with its Kylie advert (you’ll have to Google that one). Most of us fear getting a call to say “there’s been a problem with one of our ads”, but the Fedirici team must have leapt for joy when their latest creation was banned.
Lots of companies have started using social media, but they haven’t embraced it. They are using it to announce press releases and link to their own press cuttings. They aren’t engaging with their audience. Sticking to familiar tactics, the old marketing practices, is playing it safe. You probably won’t get burned—but you almost certainly won’t be a big success.
Sound just like everybody else
Marketing and sales aren’t short of trends and buzzwords. ‘Verticalisation’ and ‘solution selling’ for example. But dogmatically following trends regardless of your company’s position can lead to problems. For instance, instead of just looking inside our own industry for best practices, we should look more broadly: we may have more parallels with other sectors than we think. Many companies have a specialist financial services team, but when it comes to dealing with its customers and branch staff, doesn’t a retail bank have more in common with another high-street consumer-focused organisation than with a broker dealing in complex derivatives? Similarly, solution selling training courses can just train sales staff (and marketers too) to adopt a veneer of boring, vacuous customer-centric terminology rather than really focusing on serving actual customer needs. What’s bad, boring, and barely read all over? Business writing. If you could taste words, most corporate websites, brochures, and sales materials would remind you of stale, soggy rice cakes: nearly calorie free, devoid of nutrition, and completely unsatisfying.
So what lesson can we learn from all this?
- Don’t be afraid to look ahead and move quickly when a real opportunity emerges. Take off the blinkers and stop dismissing your competitors as misguided: every new idea gets labelled as ‘crazy’ to start with.
- Take some risks in your marketing, with your R&D, with your sales approaches. What’s the worse that could happen? You get an advert banned or a product flops. That happens to even the safest organisation.
- Be afraid of buzzwords. Genuine innovation doesn’t come from following the herd—and all too often, buzzwords get in the way of communication with your customers.
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Posted by John on 6 May 2011