“The customer rarely buys what the company thinks it’s selling.”— Peter F. Drucker
“Let them eat cake” is a phrase often attributed to Marie Antoinette, the Queen of France during the French Revolution. Marie Antoinette never said this, in fact, the phrase pre-dated her arrival in France (from Austria). The origin of the phrase might be from John Jacques Rousseau’s “Confessions”. In his autobiography, Rousseau referenced a princess, who, after being told that the French people faced a bread shortage, due to a poor crop harvest and an infestation of rodents, exclaimed, “let them eat cake!” While we are clearing things up, she supposedly said brioche, rather than cake. The fact that brioche was more expensive than bread highlighted how out of touch she was with her subjects. The real message here was to emphasise the disconnect between the Aristocrats and the plight of the people of France.
I share this story to highlight how this disconnect is widespread in the boardrooms (and war rooms) of many established organisations and startups alike. In large organisations, leaders are often starkly out of touch with the needs, wants and desires of their customers. Furthermore, leadership is often out of touch with operations imposing impossible timelines and unattainable targets driven by wishful thinking, ego and flawed assumptions (see Rita McGrath’s overview of the closure of CNN+ streaming service after just a month in operation and an expenditure of $300 million.)
Another way we can be out of touch with our business is when we focus on traditional competitors and this focus creates blind spots. To stay competitive in today’s fast-changing economy, we need to uncover blind spots in our business and in our thinking. Almost a decade ago, I attended a course in Havard on disruption with a former guest of The Innovation Show and author of Better, Simpler Strategy, Felix Oberholzer Gee, he told us about a great case study of The Black & Decker power drill.
Who Is Your Competitor?
Imagine you are the leadership team responsible for the power drill product line for The Black & Decker. You have just taken over the division with the challenge of growing your market share, which has slipped in previous years. Time to explore the competition. Who is stealing your lunch? But wait, who is the competition? Ah, it’s Bosch or Hilti or Makita or some cheap knockoff drill, right?
The only way you can truly know this is to do what former guest on the Innovation Show, Steve Blank says, you need to “Get out of the building“, and you need to meet potential customers and existing ones. For Black and Decker, the competition for drills were not the other power tools adorning the same aisles in the DIY store, the answer was counterintuitive. Their competitor was in another category.
In the USA, most people purchase power tools as gifts, they are not “impulse buys”, equally, very few people go to the store to specifically buy a power drill. However, many people buy drills for fathers’ day or on their DIY enthusiast partner’s birthday. Now that is useful information that changes the nature of the competition. The competition is no longer another power tool, but anything that competes for that money assigned to a gift. This unveiled the competitor to be your plain old run of the mill necktie, an unlikely competitor not likely to leave a hole in your wall but to fill the need to buy a gift.
Many companies talk about the importance of listening to customers, some organizations, walk the talk, literally. Those who take it most seriously insist that their people regularly spend time interacting at customer offices or in some cases customer homes. In a 5-part series of The Innovation Show, Ben Bensaou shared the great example of Philips.
Let Them Eat Limescale (No Longer)!
“Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better.” – Jeff Bezos (In a 2016 Letter to Shareholders)
To increase market share and keep up to speed with the changing needs of their customers, Philips sent some team members to literally live with UK families. The teams reported a problem that they had been previously unaware of. They observed people pouring boiling water from the kettle into a cup to make tea. In many instances, there was this thin coat of limescale in the cup. People were so used to the limescale problem, that they dealt with it by scooping the limescale out of the cup with a spoon.
Rather than direct complaints at the appliance manufacturers, customers targeted the water authorities. So what did Philips do? Armed with this knowledge attained through observation, they returned to the mothership. Soon afterwards, they developed a limescale filter to solve a problem for the customer. This small iteration helped them boost market share for a while until all kettles now contain this filter.
This anecdote unveils something very interesting, even when the customer has. voice, even when you listen and run focus groups, you can still miss vital information that you can only observe by leaving the mothership and getting into the trenches. (Interestingly, Ben Bensaou calls this not the Voice of the Customer, but the silence of the customer, which we need to listen for equally as much.)
A final word is, this is hard work, there are so many moving parts in a business environment that is moving at breakneck speed. The best way to survive such change is to have everyone in your organisation engaged, spotting trends and having the means to share those trends and observations back to the mothership to those people formulating strategy. I have done it in my own business, fewer clients want 1 or 2-day workshops, but want micro-workshops in some cases 40 minutes and in other cases 2 hours. The only way to know is to get out of the building and be open to making the changes, which means having an agile mindset.
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