Did you have the GFC in your SWOT?

The truth about business success is boring. And hard. One of the key obstacles organisations face is that they are misinformed (often by cowboy consultants) about the real merits and the proper use of some key business processes.

There are three of these business processes that are now mangled to the point where they are practically useless:

Process #1: Branding

READ THIS to get a very good take on how organisations are misled about BRANDING. I won’t add more to it because it is described well. (If you still need more convincing, read a few posts by this very smart advertising exec who really calls a spade a spade.)

To be clear; the problem is not with branding, it is how it is understood and how it is (mis-)used.

Process #2: Research

Most people (and therefore organisations) place too much value on (consumer) research. Back in 2010 I wrote about this, and it resulted the most ‘unsubscribes’ I had from my blog in one day. Being stubborn, I wrote again how people are seduced by statistics.

Steve Jobs apparently said that:

“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”
and also
“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

 

I am not referring here to being arrogant, but rather to the a misguided belief in the value of numbers and (most types of) research.

ABC’s media watch did this expose on McCrindle Research. (Very interesting!) I have no specific comment about this specific organisation, but I can tell you that researchers very often (usually?) draw conclusions from single, often invalid, poorly designed studies that become organisational gospel.

 

For a serious, philosophical look at the difficulties with research, read this piece published last week. Although it relates more to the hard sciences, it proves some of my arguments exactly:

 1. Customers can not articulate their own desires effectively and clearly.

2. Very few research studies are replicated and even if they are, they rarely produce the same results.

3. What people want to say and what they say and what you think they said and what they eventually do are four different things.

Seth Godin said this in a post last week: “No one actually understands what the market wants.” And I will add that trying to understand it is mostly a waste of time.

But why do people persist?

Probably because a manager who acts on ‘research’ can’t be blamed if things don’t work out. It is the safe option - CYA , if you know what I mean.

There is no substitute for talking to your customers though. Retailers are advantaged because they are the ones with daily direct contact with the consumer – and this is a powerful business asset that is rarely used.

The best research practice is to systematise and institutionalise customer conversation in your organisation.

Process # 3: Business Plans

I have also written (back in 2009) about the stupidity of business plans. ‘Gurus’ will give you statistics about how many failing companies don’t have business plans but can’t tell you how many failing companies have business plans.

(I can guarantee that every listed company has a business plan, and see how many of them fail and fail to perform. And few organisations seem to have had GFC in their SWOT. Did you?)

Having a business plan may make you feel better - but that simply provides a false sense of security. What is actually required is MUCH harder to achieve than a business plan – and it is ‘adaptivity’.

Recently Tom Peters wrote about the number one skill required by an organisation is to be ‘adaptive’. (And he is a guru actually worth following.)

 

“Adaptivity is more or less a 100% function of the workforce and how it is recruited and developed and encouraged and appreciated—or not.”

If not Branding, Research and Business Planning; what then?

To be successful businesses must master these processes:

1. Developing an innovative, differentiated business model

2. Articulate a clear, understandable proposition to a viable market

3. Systematise (embed) the organisation’s ability to adapt to constant change and to constantly monitor and re-visit 1 and 2 above.

 

An organisation needs to have thought/planned its business model and it must be sound. Once that is achieved, it should (again) institutionalise/systematise its ability to adapt and reconfigure and respond to inevitable and usually unforeseen changes.

The discipline of re-visiting your business model and the difficulty of getting your organisation (not just a few managers/ executives) to operate constantly in a mode of responsiveness and innovation is very difficult.

Maybe that is why the business plan option is the preferred one. And of course in a world where organisational politics govern the operation, having a document with fancy charts and tables (in colour) backed by ‘research’ is something you can’t argue with, right?

I know many won’t agree – so feel free to give me a piece of your mind.