COMMUNITY AND BRAND INTENTION

When it comes to the art of business and business success, whether it’s the business-to-consumer or business-to-business marketplace, nothing rings truer than the importance of knowing how to win the customer. If you’re clear on your brand intention and your company or team is aligned with it, you’ll definitely increase your chances to win.

Alignment to brand intention is a characteristic and key ingredient that successful market leaders have in common; it plays a significant role in how they beat the competition.

In my book, True Alignment, I discuss the six brand intentions – community, customization, preeminence, low price, physical wellbeing, and personal actualization — and how they provide a framework for understanding and leveraging what the customer is seeking and aligning a company’s strategies to meet those expectations.

Community

One of the six brand intentions is community. Community defines the brand intention of products or services that invite and deliver membership in a group. It offers relationship, afiliation, and connection.

The customer motivation in the brand intention of community is attention.

Community offers a sense of belonging and inclusion. It satisfies the human need and desire to feel important and have self-worth. Group members are able to receive attention and give it to others.

Business success: A tale of brand loyalty and community

Suppose two young, very creative, and intelligent men get together to develop a new product. It began a few years before they met, when at 21-years old, one man began exploring how to bring an idea to fruition. Two years later, he finds someone interested in collaborating with him to create a start-up company and bring the idea to market. They share a vision for what’s possible and begin building a prototype in a 10- × 15-foot shed.

They work tirelessly and, hoping it will be the beginning of a successful launch into the marketplace, begin seeking people to use their product. Three years later, customers begin to want their product. They find someone willing to sell it for them, develop a logo, move into to a 28- × 80-foot building, and expand their operation to eight people. The two men continue to recruit talented people interested in collaborating to build the business and, over time, the company grows to over $5 billion in annual revenue. Despite many ups and downs and challenges, they find new ways to collaborate with others, solve problems, and to continue to grow.

The resilience of its brand is defined by how it overcomes great challenges, building an identity of boldness and perseverance. Its customers become some of the most loyal brand ambassadors on the planet and the driving force behind the company’s capacity to continually expand and define ways to market and reinvent itself.

The company becomes one of the first to use crowdsourcing to engage its customers to market to others. With little prompting, its customers invite others to join its worldwide following. The company’s diverse community, comprised of people in all walks of life and generations, celebrates its shared passion and loyalty for the product and its brand by gathering in groups a half million strong.

Can you correctly select the brand to which this story applies?

  1. Nike
  2. Harley-Davidson
  3. Facebook
  4. Geico
  5. Budweiser
  6. Microsoft

If you chose Harley-Davidson, you are correct. In 1903, when the company produced its first motorcycles, its inventor William S. Harley was 23 years old and his partner, Arthur Davidson was 22. Their story of business success is familiar in that the company’s founders were young, talented, and started the business in a fashion that many of today’s success stories mirror.

Much like the folklore of the Microsoft garage and the humble beginnings of so many other companies that capture our imaginations, Harley-Davidson started with practically nothing more than a great idea. Over one hundred years later, the company generates over $5 billion in revenue.

business success harley davidson

At the core of their success is exceptional brand loyalty.

The essence of the brand, what makes it so powerful is its incredibly strong brand intention of community. The company’s mission statement has community and inclusion embedded in it:

“We ride with our customers and apply the connection in every market we serve to create superior value for all our stakeholders.”

The company’s market strategies embody and continue to be aligned to its brand intention. Much as it did in its early years when it sold to members of the military, the company pursues selling to groups and communities and leveraging camaraderie and affiliation. After World War II, when motorcycle owners loosely grouped into organized clubs, Harley-Davidson captured the idea of community and built its brand around it. Over the years, despite its quality issues, the brand maintained itself by expanding this platform.

Today, the community continues to expand and the company’s sales continue to grow. The Sturgis and Daytona motorcycle rallies attract well over a half million riders each. While not directly sponsored by Harley-Davidson, their motorcycles enjoy, by far, the greatest representation at the two events. To further the community brand intention, the company hosts toy drives, conducts cell phones for soldier campaigns, and sponsors concerts and an assortment of other events. It encourages participation in the Harley Owners Group (aka HOG), markets to members of the military, offers group rides, and locally connects individuals to fellow riders. The logo the company unveiled over 100 years ago hasn’t changed much, is recognized the world over, and maintains its popularity even as a tattoo, which is a pretty good representation of the power of brand intention.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

LEADERSHIP, CULTURE AND THE BUSINESS CODE

At the heart of complexity lives simplicity.

Aligning a business, company, or team requires a clear and constant focus, continuous effort, and all the skills necessary to be a great leader today and tomorrow. Members of organizations and teams must be more engaged and committed than ever before. For this, they need as much information and development as their leaders do. Every member of every team or company has a role in ensuring that alignment exists.

The Business Code is a framework for alignment that can be applied to any organization or team, regardless of size. There are four elements to the Business Code: the customer, brand intention, culture, and leadership.

LEADERSHIP AND CULTURE

Among a leader’s many responsibilities, none is as powerful and integral to success as understanding culture. Therefore, the leader’s behavior must be in alignment with the culture’s expectations.

Without this, it is virtually impossible to create and lead an aligned organization or team. As complex as the study of leadership is, the most straightforward definition of leadership is influencing others to act. Leaders are responsible for acting in a manner that clearly conveys how the intention of the business is implemented and ultimately how the customer is treated.

To influence culture, leaders primarily do three things.

  • They role model acceptable behaviors, which define how individual and group success are achieved;
  • They reinforce what is acceptable and unacceptable behavior, and
  • They represent the reputation of the culture.

These basic aspects of aligned leadership are not to be taken lightly. The influence a leader has, formally and informally, can easily be undermined when a leader’s behavior is misaligned.

Aligning natural preferences to group strategies

Another aspect of a leader’s influence that is often overlooked is how well aligned the leader’s natural preference is to the strategies the group is undertaking. The way we behave comes from our psychological makeup and preferences. How we are wired directly impacts how we think strategically, as well as how we relate to the customer experience. This preference guides our beliefs about what, why, and how a product or service is offered and delivered to the customer.

The customer ultimately experiences the preferences of the leader. You don’t have to look hard to find examples. Just consider Henry Ford, Oprah Winfrey, Bill Gates, Indra Nooyi, Richard Branson, Steve Jobs, Warren Buffet, Steve Wynn, Walt Disney, and Mark Zuckerberg. Each demonstrates their personal preference in how they lead, as well as the market strategies and brand intentions they pursue.

STARBUCKS: AN EXAMPLE OF LEADERSHIP AND CULTURE

Consider the example of Howard Schultz, the CEO of Starbucks. Schultz believes that connecting to and caring for people is paramount to success. This not only extends to the strategies for how Starbucks engages its customers; it is also evident in the company’s human resource strategies.

Schultz was born and raised in the Bronx, New York, where his family lived in a housing project. He often refers to his father, who struggled in low-paying jobs and had little money, no health insurance, and no workers’ compensation insurance when he got hurt on the job. In Starbucks, Schultz set out to build a company in which employees would be respected and well cared for. While the company’s main goal was to serve a great cup of coffee and to connect and care for its customers, Schultz said he wanted to build a “company with a soul.”

Schultz’s values and preferences resulted in a set of practices that are uncommon in retail businesses. Employees working at least 20 hours per week receive comprehensive health coverage for themselves and their families, as do unmarried couples. Along with stock option plans, employees are given a great deal of personal responsibility and treated with the respect that Schultz thought his father deserved and hadn’t received. How employees are treated by supervisors and the benefits they receive result in high loyalty and lower turnover.

These innovations come from Schultz’s life experience and personal preferences.

They are evident in the company’s strategies, including, in the early stages of the company’s growth, never to franchise. This decision avoided any possible dilution of, or variations in, the company’s culture and assured consistency in how both customers and employees are treated. In the case of Schultz and Starbucks, the alignment of a leader to the company’s market strategy and culture is apparent. The influence of his leadership on the organization’s performance is difficult to debate, and his reputation as a leader is undeniable. In 2011, he was named Fortune Magazine’s Businessperson of the Year.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

BACON AND EGGS ANYONE?

Review the following list of twelve of the most influential businesspeople in recent history. Is there any name you’re not familiar with?

  • Bill Gates
  • Oprah Winfrey
  • John D. Rockefeller
  • Henry Ford
  • Mark Zuckerberg
  • Walt Disney
  • Coco Chanel
  • Thomas Edison
  • Warren Bu!et
  • Edward Bernays
  • Steve Jobs
  • J.P. Morgan

The odds are fairly good that Edward Bernays is the only unfamiliar name. Who is he, and why is he included? The answer tells us something about how marketing and advertising reached such a sophisticated level of influence.

The father of spin

The idea that we purchase products to fulfill our desires and that our buying decisions are based on emotions rather than logic is certainly not new. While several versions of how this evolved exist, they all involve Bernays, an Austrian-born immigrant to America, who is considered one of the most influential minds of the last century.

Bernays, who is known as “the father of public relations” and “the father of spin,” pioneered public relations. He provided the foundation for emotional selling and marketing and influenced much of the twentieth century’s economic and political thought.

In the mid-1920s, the Beech-Nut Packing Company saw its revenue from bacon sales lagging and turned to Bernays for help. Before Bernays, the assumption was that people used logic to make decisions. Bernays, however, was influenced by his uncle Sigmund Freud, who believed that people are more motivated by emotion.

Thus, Bernays understood that much of human behavior is driven by instinct and unconscious desires. As a result, he believed that appealing to the public’s emotions would result in greater sales than promoting the dependability and reliability of a product.

bacon and emotional buying

Bringing home the bacon

To sell more bacon, Bernays decided to create an emotional appeal for a heartier breakfast that included bacon. In the mid-1920s, the ideal American breakfast was toast, juice, and coffee. To change people’s thinking, he asked over 4,500 physicians whether they thought a “light” or a “hearty” breakfast was healthiest. The physicians overwhelmingly chose the hearty breakfast. Bernays’ idea of a hearty breakfast included bacon and eggs, so he used this definition when he released the findings of his study.

The news made headlines and within a short time, bacon and eggs became America’s breakfast. Beech-Nut Packing enjoyed a significant increase in bacon sales, and breakfast was redefined. Bacon and eggs, or some variation remains, by far, America’s best-selling breakfast. This includes McDonald’s McMuffin.

Bernays’ contribution remains incredibly powerful. The idea that what we buy is driven by emotion is how products or services are marketed, branded, and sold today. Automobiles sales play on motivating the buyer’s desire for freedom, luxury, pride, and appearance. Clothing and accessories are marketed to reflect sexual prowess, attractiveness, and status. Food marketers promote physical wellbeing, goodness, and, for “foodies,” feeling “in” on the latest trend.

Bernays’ ideas have been advanced, expanded on, and fine-tuned, and emotional selling is still with us. Whenever you hear “doctors recommend” or “more dentists recommend,” you have Eddie Bernays to thank.

 

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

IT’S ALL ABOUT ALIGNMENT

The key strategic imperative of any business is alignment.

Alignment has long been the greatest challenge of leadership. The importance of alignment in business, along with its effect on performance, has only increased over time. Today, to come close to competing and succeeding in the chaotic and rapidly shifting business environment, leaders must create aligned teams and organizations.

For extraordinary companies — those that consistently compete and win in the marketplace — the overriding characteristic that is invariably present and separates them from their competition is alignment. And, because it is so important, the challenge is all the more difficult.

Most leaders, teams, and companies struggle with alignment because they lack an effective and easy-to-apply framework and approach. As a result, they tackle individual aspects of business — such as vision, strategy, processes and systems, and culture — without aligning them.

The Dangers of Misalignment

Most of us are all too familiar with the consequences of misalignment. We get caught up in the conflicts and blame games that result when everyone is not working toward the same outcome. Time and energy is wasted trying to overcome misalignments, which can disrupt and destroy teamwork and eventually bring down entire companies.

The consequences of misalignment are grave. Among others, they include:

  • A lack of focus on results that support the vision and strategy of the team and organization, resulting in poor performance.
  • A lack of a shared and consistent approach to serving the customer, which damages the company’s reputation and brand and creates customer distrust.
  • A lack of the ability to leverage and fully utilize team members’ individual talents and strengths, which decreases motivation and reduces their desire to contribute.
  • A lack of clear expectations resulting in unmet performance requirements, poor accountability, distrust, and potentially divisive conflict.

Misalignment is costly.

Typically, misalignment results in a negative financial impact, which can be obvious or often hidden.

Among the hidden costs are:

  • unmet goals and objectives
  • missed opportunities
  • missed sales
  • unmet promises to the customer, and
  • a myriad other failures that result from dysfunction within a group, team, or company.

One way or another, misalignment results in a failure, or a lack, of execution, which has a negative financial impact on a business.

All too often, leaders find themselves searching for answers to these problems without realizing that misalignment is at the root of them. They instead rely on hit-and-miss approaches and fixes, as well as temporary measures that provide only short-term solutions.

Great leaders and team members actively seek out and confront misalignments.

Aligning a business, company, or team requires a clear and constant focus, continuous effort, and all the skills necessary to be a great leader today and tomorrow.

Leaders need a systemic framework for understanding, assessing, and creating alignment. They and their teams and organizations require an approach that cuts through the complexity and eliminates the noise from multiple priorities, numerous initiatives, and the confusion of choices and options; an approach that provides a clear and simple roadmap to success.

The Business Code

The Business Code, discussed in depth in my book True Alignment, is a framework for alignment that can be applied to any organization or team, regardless of its size. It shows leaders and their companies how to confront and overcome the challenges of misalignment. The code also provides the tools needed to create strategies and initiatives and take actions that result in the alignment required to compete and achieve high levels of performance.

the business code - alignment in business

The outcomes of applying this framework include:

  • Alignment that clearly defines the trusted relationship of the business to the customer, the customer’s expectation, and what the brand
    stands for.
  • Alignment of leadership that is responsible for role modeling, reinforcing, and leading an aligned culture and is committed to the reputation
    and success of the business; leaders who hold themselves and other leaders responsible for their personal alignment to the organization,
    as well as its vision, and its culture.
  • Alignment of goals and strategies across and down through organizations and teams, large and small, demonstrated by the contribution each group and team member makes to the organization’s vision and strategies.
  • Alignment of each individual to the values, beliefs, and expectations of the culture; each member knows how success is created at individual, group, and company-wide levels.
  • Alignment that results in every person being responsible and acting in alignment with the business’s intention, as conveyed through each member’s commitment to the customer.
  • Alignment that contributes to the resilience that great companies and teams demonstrate when confronted with difficult issues and challenges and keeps them from going off course or losing sight of their mission, vision, and intended outcomes.
  • Alignment that is demonstrated through every decision and action taken by every member of the organization or team, how they fit into its culture, and what the company and team have promised to deliver to the customer.

The Business Code starts simply, letting us discover the richness of how business fulfills our needs. It allows us to connect the needs of the customer to our brand’s intention as delivered through the products or services provided. Next, it connects the ways in which we lead and operate our businesses and shows how they can be aligned to become more effective and efficient.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

WHAT IS DESIGN THINKING

Design thinking is a human-centered innovation process that emphasizes observation, collaboration, fast learning, visualization, and rough prototyping. The objective is to solve not only the stated problem at hand, but the real problems behind the obvious.”
Thomas Lockwood

So what is design thinking? 

There are many definitions of design thinking, but to be honest they are all pretty much the same. That’s because design thinking itself is an open, shared, and co-developed concept. So let’s not get wrapped up in semantics. According to Wikipedia:

Design thinking refers to creative strategies designers utilize during the process of designing. It is also an approach that can be used to consider issues, with a means to help resolve these issues, more broadly than within professional design practice and has been applied in business as well as social issues. Design thinking in business uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.

In our book, Innovation By Design, Thomas Lockwood and I conducted an in-depth study of 21 of the most innovative organizations in the world. As a result of our research, we identified 10 attributes they all share and that they use to leverage design thinking to produce change, drive new ideas, and deliver meaningful solutions.

As Thomas points out in his book Design Thinking, there are several key tenets that appear to be common in design thinking, and that we found consistently present in our design thinking organizations.

Identifying the right problem and understanding the user

The first tenet is a quest to identify the right problem to solve, coupled with a deep understanding of the user. This is achieved through:

  • observation,
  • fieldwork and research,
  • an empathetic approach to discovering stated plus unarticulated user needs, and
  • open inquiry.

Rather than adding the dilemmas of missing the mark in understanding consumers’ wants and needs, taking the approach of design thinking makes understanding the problem and the desired outcome all that much more focused and faster.

“The key is to start from a seeking to understand point of view”
Thomas Lockwood

Empathy coupled with collaboration

Empathy coupled with collaboration is the second tenet of design thinking. This applies to both the users and through the forming of multidisciplinary teams. In collaboration, constraints can be removed and great ideas can emerge. This helps to move an organization past silos and toward radical collaboration, rather than incremental improvement, thereby moving faster toward the creation and delivery of the right solution, a valued solution.

innovation - what is design thinking

Accelerate learning

The third tenet is accelerating learning through hands-on experimenting, visualization, and creating quick rough prototypes, which are made as simple as possible in order to get usable feedback. Because design thinking is effective in radical problem-solving as well as incremental improvement, the more experimentation the better.

The quick and simple prototypes also help grasp a potential implementation well before resources are spent in development. Often the goal is to fail quickly and frequently so that learning can occur. Prototypes can be sketches, rough physical mock-ups, stories, role-playing, concept storyboards—anything to help make the intangible more tangible. In a world in which shorter and abbreviated written messaging, visual cues, and emotional storytelling are overtaking written forms of communication, visualization has become a primary tool in the engagement of innovative thinking.

Integrating business model innovation

Thomas Lockwood is a big advocate of integrating business model innovation during the process of design thinking, rather than adding later or using it to limit creative ideations.

It’s a delicate balance, but also one of the attributes of effective design thinking organizationsThat is, they are able to integrate thinking by combining the creative ideas with business aspects, including the three Ps (people, planet and profit), in order to learn from a more complex and diverse point of viewThis is also helpful in anticipating what new business activities and the resources that may be required in the implementation of a new product, service, or experience initiative.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

EXTRAORDINARY BRAND RECIPES

What makes a brand extraordinary? What differentiates an extraordinary brand from its competitors? Why do we respond to powerful brands as we do? What is in the secret sauce of winners? Why do we want to associate with the best? What do extraordinary brands have that the others don’t?

Again and again we ask these questions. We want to know how to replicate that high level of success and make it our own. Whatever role we have in a company or team, we all aspire to be a part of something extraordinary.

First, extraordinary companies with extraordinary brands are well aligned. Their cultures and leadership are aligned to the company’s brand intention, which delivers in alignment to what the customer is buying.

Second, the company has a unique recipe, and the main ingredient is clearly articulated, understood, and focused on. The priorities of what to focus on in creating and delivering the company’s products or services are known to everyone and all act in alignment to that set of priorities. A sense of individual and shared commitment exists among company or team members, regardless of role or function, to relentlessly pursue and deliver the main ingredient to the customer.

While this may appear complex, it doesn’t have to be. The simpler the message, the more customers are able to see and feel the difference.

Simplicity is one of the attributes of extraordinary brands.

Complexity in a product or service often makes the customer anxious. While we like to have choices, having too many choices is not a good idea.

Have you ever felt uncomfortable when someone tries to sell you something with a lot of add-ons or options? Do you ever find yourself questioning the motives of the seller? When we’re given too much to think about, being sold too much, or being sold something more complicated than we want, we tend not to trust the seller. Or we don’t trust our own ability to make the right choice.

If the provider of a product or service claims that it will fulfill all your needs, that’s a pretty high mark to reach. You are likely to respond skeptically. I am not saying it’s not possible; I am saying it is highly unlikely. Therefore, we’re less likely to trust it.

Potentially, a customer may lack confidence in a company that offers a little bit of everything or tries to sell an overly broad range of products or services. We tend to place more trust in those that work to master a particular product, service, technology, or expertise. If a company offers a little of everything, it increases the likelihood that it’s not going to be great at any of them. The one exception is a low-price provider from which the customer is not expecting a high degree of product knowledge or service competency.

Extraordinary brands: a passion for music

I once read a poem in which the author compared walking into a bookstore to walking into a bakery. The scent of books evoked the emotion associated with the familiarity and anticipation of a fine bakery. He wrote that opening a book’s cover was like breaking into a freshly baked loaf of bread and that flipping through a book and stopping at a page and reading was like taking the first bite.

This is the experience I have every time I enter Wildwood Guitars. Whenever I set foot into Wildwood, I sense its uniqueness. By today’s standards, its approximately 500 square feet is a small space from which to conduct a thriving, rapidly growing retail business. It is also part of its charm and likely contributes to the concentrated, alluring aroma of the fine woods and finishes emanating from the guitars hanging on the walls. As customers walk into the store and across the old worn Italian rugs, they are quickly and warmly greeted by the artists sitting at the four desks that have, over the years, replaced the counters and display cases that once occupied the space. Calling them sales clerks (they don’t have official titles) would be a gross understatement. Each is an accomplished player, who leaves customers marveling when demonstrating a particular guitar. They don’t sell. They help you choose the guitar that’s right for you, that best fits the music you want to create. As they will tell you with conviction, it’s not about buying just any guitar. It’s about the art and your self-actualization.

When you enter Wildwood Guitars, it doesn’t cross your mind that it is a thriving leader in its market, an important player in a worldwide industry. Yet it is one of the largest independent sellers in the world. It achieved this by becoming a powerful niche player in an industry that has moved rapidly toward consolidation and where big is the norm.

The world’s largest retailer of musical instruments is Guitar Center. Owned by Bain Capital, “Guitar Center plunged into the new millennium with the forward-moving momentum of the previous decade and a vision of vast expansion.” Compared to Wildwood Guitars, the company is a giant, easily the Wal-Mart or Best Buy of music, with over 239 locations in the United States and over $2 billion a year in revenue. The company proves that a low-price brand intention and the ability to offer a large selection of items and brands can be a sustainable and growth-oriented path to success. Throughout its history, Guitar Center has grown through a strategy of leveraging acquisitions and opening new stores.

Like all great businesses, even large volume players need to change to succeed. Any great company must innovate and evolve to be competitive long-term, and Guitar Center has proven it can adapt. It has an operational capability and efficiency enabling it to quickly distribute its merchandise to the store level, to move it from store to store, and to swiftly respond to its customers. As part of its vision, the company states, “Guitar Center has no intention of slowing down and will be around for generations to come.”

Two different approaches

The difference in Wildwood Guitar’s approach to how the customer is treated and the intention of its brand couldn’t be any more different than Guitar Center’s, whose stated main customer objective is “to provide for the musician’s every need.” As a result, it offers a broad array of products—keyboards, drums, audio equipment, DJ turntables—pretty much anything you’re looking for. Guitar Center is a low-price retailer with an extensive selection, touting discount pricing. Customer service is naturally in alignment to that intention. While the sales associates at Guitar Center receive product knowledge training, they most often help customers find a particular product from the extraordinary range of choices and fill the role of sales clerk.

The low-price brand intention influences the sales associates and their perspective on the company’s culture.

The contrast with Wildwood Guitars couldn’t be any starker. While many of the influences of big-box retailing have found their way into the marketing of retail musical instruments (including competition on price and volume), Wildwood has resisted this impulse and has successfully held its own. In fact, it has done much better than that. It has become one of the most trusted independent guitar dealers in the world by carving outa niche that has resulted in a consistent growth. Year to year over the past decade, it has experienced double-digit growth by focusing on selling guitars, a narrow selection of high-quality ampliflers, and a few select accessories. It has moved away from selling low-priced items and taken a boutique approach by offering high-quality, vintage, custom, and rare guitars.

Wildwood is currently the largest Fender Custom Shop seller in the world. Among independent dealers, it consistently ranks among the top providers of Fender, Gibson, Taylor, and several other well-known brands. Among guitar makers, it has achieved an elevated status, resulting in several lines of “custom” guitars that include the Wildwood brand in their model names. The average price of a guitar sold at Wildwood is between $3,000 and $4,000.

Steve and Marilynn Mesple founded Wildwood Guitars in 1985. Steve has had “a lifelong love affair with music and guitars.” Their approach was to “sell the greatness and goodness of guitars.” Steve’s leadership approach and its influence on his team at Wildwood are evident and is an excellent example of a leader’s influence on the customer relationship, brand, and culture.

The relationship between Wildwood Guitars and its customers centers on the trust that comes from caring. Customers from far and wide interact with the artists who make up Wildwood’s team and, by phone and email, making buying decisions based on their input and recommendations. The members of the team build relationships, carefully listening to what the customer is looking for from a particular instrument—what they play, what they want to achieve, and what they aspire to—as well as what the customer likes in a guitar, including how it looks, feels, and sounds. Without ever playing the instrument, the customer makes a decision. That level of trust is compelling and is evidence of the caring nature of the Wildwood brand. It explains why the vast majority of Wildwood’s sales are not in-store. Steve makes it very clear. “We never try to sell the customer anything that they don’t want to buy . . . period. That’s not who we are and it’s not what our customers would ever expect from us. Everyone here knows that’s not something we would ever do.”

Steve Mesple has made changes along the way. And while they didn’t always get the results he was looking for, he has worked toward always making changes consistent with what motivates his customers, the alignment to the business’s brand, and what he sees as an unwavering culture of passion. He’s carefully recruits the right people for his team and rewards them for their passion and dedication. With the advent of the Internet, he expanded his sales capabilities and reach. The store’s website now offers over 2500 videos of great guest artists playing Wildwood’s offerings. The videos are not just entertaining. They are educational, inspirational, and in service to the customer. As Steve told me, “People love to hear great guitars played by great artists. It gives them the opportunity to experience what we can offer them, which is an unparalleled inventory of amazing guitars and trust. And we do it with unbridled passion.”

To compete with the appeal of the Wildwood Guitars of the world, Guitar Center offers through its brand Musician’s Friend, a single-person sales unit called Private Reserve. Customers can call and speak directly to the person at Private Reserve and get the expert assistance of an artist in the selection and buying of a custom or high-priced guitar. In relation to its brand and the perception of its customers, Private Reserve is much like a small stand-alone brand that lives within the larger brand intention of Guitar Center. While it offers a distinct service and product, the customer may not intuitively or intellectually find it to be in alignment with their interpretation of the Guitar Center and Musician’s Friend overall brand intention.

At the core of Wildwood’s achievement and the success of Guitar Center is what lies at the heart of the success of any business. It is alignment. For any enterprise, large or small, competing in a local, regional, or global marketplace, the required ingredient is the alignment of the customer’s expectation and their experience of how it is delivered. This means that the company’s people work with one another and act toward the customer in alignment with the brand intention and the customer’s expectations.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

DESIGNING CULTURE

Transforming or designing culture requires changing individual and collective behavior.

One of the greatest values to be gained from design thinking is the impact it can have on the culture of an organization and how it contributes to greater collaboration and innovation, regardless of its size.

Designing Culture: The Example of GE

In 2016, General Electric’s (GE) revenue topped $123 billion. GE has more than 330,000 employees operating in over 180 countries. It comes as no surprise that in a commentary published in April 2017, John G. Rice, the company’s vice chairman, shared his observation that it’s natural for a business of GE’s size and scale to see silos manifest along the way. He pointed out that the sharing of ideas and collaboration necessary to be innovative, and the ability of employees or team to add new value, have always been a challenge for the company:

Without a radical shift in everyday working behavior—in employee’s relationships with the company and one another—silos will remain, and the sort of cross-industry and horizontal collaboration that companies like GE need to foster for growth is not going to happen.
John G. Rice, Vice Chairman, GE

For any organization to undergo the continuous change required to sustain and grow, and to be innovative, its leaders and employees need to understand the tension between the paradigm of consistency offered by its culture and the ambiguity necessary for change. This means that they must be able to, at a root level, both trust in the necessity of their culture to evolve, while not relying on or creating unnecessary conditions of predictability.

It also requires being responsive to what is required to attract and leverage the ever-evolving world of talent.

Attracting creative talent

One of the keys to attracting creative talent is to create a culture that thrives on continuous learning and risk-taking.

This requires creating shifts in the culture to interest the new generation in the workforce, a group that wants to engage in a set of work experiences that are radically different from those of the past—a set of experiences that call for the greater levels of participation, and more collaborative and fast-paced ways that design thinking affords. It is about a more creative and engaging way to work and innovate together.

In its effort to become more design thinking–focused, GE moved its headquarters to downtown Boston.

Of the 800 positions at its new headquarters, 600 are designers, developers, and product managers—all evidence of the shift from being engineering-driven to design-driven, from product-centric to customer-centric, and from marketing-focused to user experience–focused. It’s also a sign of the need for executives to collaborate more with designers, design thinkers, and design leaders.

In a September 2016 interview with the Aspen Institute’s Walter Isaacson, when asked about the rise of the creative class and the company’s move to Boston, GE’s CEO Jeff Immelt explained:

I have to say it’s real. I thought it was a little bit of B.S. initially, I wasn’t sure. And when I looked out the window — when I was in Connecticut, it was beautiful, awesome, great office — but when I looked out my window, I saw nothing, there was nothing going on. I could watch cars go on the highway, things like that. I’ve been [in] Boston now six weeks and you just walk out the door. You’re in the middle of an ecosystem that quite honestly, for a big company, it makes you afraid. You’re where the ideas are. You get more paranoid when you’re doing that and that’s a good thing.
Jeff Immelt, CEO, GE

And how else is GE’s new headquarters different? “The new headquarters will be leaner, faster and more open with a constant flow of industry partners, customers and innovators.” The intent, execs say, “[i]s that it will be more like walking into a start-up in an urban setting than the remote suburban headquarters of the past,” helping to transform its culture from a functionally driven one with silos, to a culture focused on collaborative design thinking and creativity.

Taken from https://www.ge.com/reports/15169-2/
Architecture mockup from the planning stages of GE’s Boston HQ

From fear to transformation

What keeps us from realizing the tension between predictability and the ambiguity of change, the kind of real change that offers the opportunity for an organization to transform itself, and shift its culture?

One of the requirements to successfully implement design thinking to produce change and spark innovation is having a framework to understand culture. What is needed is a definition of culture and a means through which to assess the various aspects of an organization’s behavioral traits and leadership influence.

What culture does more than anything else is inform and reinforce its members how to individually and collectively attain success. It’s how to behave

The definition of what success is and how it happens is as unique to the organization as it is to an individual’s role. Culture speaks to the various aspects of behavior associated with attaining success. It includes the behaviors that support achievement or get in the way of it, resulting in a set of expectations and an understanding as to what is acceptable and unacceptable behavior.

One of the more powerful aspects of design thinking is its influence on culture. All organizations and businesses, including those that are much smaller, will encounter similar problems. Yes, the bigger you get, the more complex and difficult communication and collaboration become. Yet if you look at it through the lens of what drives these potential outcomes, the path takes us back to human behavior.

Cultures don’t create people. People create cultures.

 

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

FINDING THE UNIQUE RECIPE

In over twenty years working with and facilitating leaders and teams engaged in visioning and strategic planning, I have found that there are three key impediments to the alignment to brand intention. They appear at the highest levels of leadership and can be found throughout a company. In one form or another, they impede alignment and performance.

Agreement on brand intention

The first obstacle occurs when a company’s leaders, because of their experiences, do not agree about the brand intention that will best serve the customer. It’s not that there are too many chefs in the kitchen. It’s that each chef wants to cook his or her favorite dish.

While this can often be the case for a new group trying to evaluate and make a decision about what path to customer satisfaction to pursue, it can also affect an experienced group. Often, even with a group of seasoned and experienced leaders, I can be surprised at the level of disconnect and misalignment when it comes to clearly defining what they believe is in the best interest of the customer and the company.

Leaders want to do what they believe is competent and right. That doesn’t mean they will always be in alignment.

Typically, the opposite is true. Because each member of a leadership team has his or her own set of experiences, they have different interpretations of what works and what doesn’t. After all, if history is a good indication of what will happen and a predictor of future success, it is natural for people to pursue opportunities based on what was successful before. As a result, it’s not unusual for each member of the team to try to convince the others that his or her desired direction is the best one.

Personal Preference

The second obstacle to alignment is personal preference. As individuals, we all have a natural preference toward one of the three customer motivations and, therefore, will likely favor one brand intention over another. Underlying this is the desire to treat others in the way that we want, and expect, to be treated.

For example, one partner in the business has a preference for receiving attention. As a result, he advocates for the brand intention of customization, which aligns to preference. He believes the best way to build the business is to build relationships with customers and offer customized products that the customer is willing to pay more for. Based on his preference, he believes that the best course is to pursue a steady pace of growth while targeting higher margins.

Another member of the team prefers competency and advocates a strategic direction toward low price. Rather than taking a personal approach to the customer, she believes the shopper can be better attracted through discounted pricing. So, she advocates for building the business by gaining market share. She believes it is better to lead customers than be led by them. Because it is more in alignment with her preference for competency and control, she tries to persuade the other team members to pursue the brand intention of low price. She advocates a vision for the company that is anchored in and aligned to quickly building sales volume, taking market share, and operating as efficiently and effectively as possible to maintain lower margins of profitability and win by competing through price.

The purpose of this example is not to advocate for one or the other. It is to provide insight into how easily our preferences are communicated and how easily we allow our preferences, and ultimately our emotions, to guide our thinking and influence our decision-making.

Scenarios like this one are fairly common.

Depending on a team’s or leader’s chosen methodology, a group may engage in a competitive analysis, an assessment of market trends and variables, an opportunity and threat analysis, or a number of other processes that allow for the collection and analysis of information to incorporate and guide the strategic planning and decision-making process.

Finding the right approach is important. Making certain that everyone involved is aligned to the process is as well.

A team can easily find itself in a conversation or debate headed toward an outcome that reflects less of what may be in the shared best interest of the business and more of a contest over whose personal preference comes out on top.

Insecure Egos

The third obstacle is insecure egos. Every so often members of a team, or the leader, will advocate a direction or make a decision that does not align with what is in the best interest of the business. They want things their way or they may set out to prove that they are the smartest person in the room, regardless of the consequences to the business. They will sometimes set out to prove they can win the argument. It may be the result of a long-standing struggle or conflict with another member or an ongoing debate among multiple members. It can also be the result of partners disagreeing or a long-standing conflict between them.

In such instances, other team members can easily disengage, become disinterested, or decide they don’t want to participate in the argument and eventually acquiesce. Often, this results in members pursuing their own personal preferences by heading in the direction that delivers the best individual gain and shows little or no concern for alignment.

When leaders or members of a team act out of insecurity, they often abandon the pursuit of alignment and what is in the best interest of the customer. This can create challenges that are difficult to overcome and may cause misalignments that take a long time to recover from and result in time-consuming issues, unnecessary conflict, and dissatisfied customers.

Ultimately, a company’s success depends on the ability of its leaders to come into alignment and engage the remaining members in the process.

As a company grows and expands, its ability to align will be a key influence on its success.

To do this effectively, leadership must create a clear vision and strategies that create alignment at the organization and group level. These must then be clearly conveyed and further manifested in the roles, expectations, and goals of every member of the business. Studies show that all too often employees are disengaged and do not feel connected enough to the organization and its vision, strategies, and goals. These are symptoms of misalignment.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

THE THREE CUSTOMER MOTIVATIONS: PART THREE

We all want to feel that whomever we are buying from is treating us well. When we pay for a product or service, we expect to be treated with dignity and respect and to receive what the provider promised.

Customers want to feel that they are cared for. Caring, attention and competency are the three motivators of customers.

Caring for customers begins with:

  • how well the provider markets what it is selling, and
  • how transparent and honest the company is in the message provided in its advertising.

Caring conveys that you’ll be truthful with me.

We have become accustomed to accepting less than we bargained for. We know that the advertising is not always accurate. Advertising often tests the boundaries of truth and reality. Still, we expect that the makers and deliverers of the products or services we want will inevitably do the right thing and deliver on their promise.

Caring for customers is shown in many ways

The expectation of being treated in a caring way often extends beyond the immediate locus of the customer to the communities, the environment, and other relationships. While truth in advertising is one example, social responsibility, fair trade, and societal benefit are examples of how caring is experienced in broader ways. Along with a customer’s singular experience, the failure to create a shared value is interpreted by customers as a lack of caring about them and their world. Often, this is measured by how truthful the product or service provider is; how what they do is measured in terms of what is ethical and “right.”

Why does caring motivate customers?

The motivation behind caring is the customer’s desire to feel affection and acceptance.

In addition to the sense of caring conveyed by honesty and openness, the customer can experience physical and emotional well-being, as well as a fulfillment of the ongoing desire for self-actualization, through products or services.

Thus, when we buy a product or service that delivers caring, we also care for ourselves. This means pursuing and becoming who we want to be physically and emotionally and learning what makes us happy about who we are. These desires show up in our appearance, our physical health, our energy, and so on.

We want to be cared for, care for ourselves, and care for others.

Whole Foods, the world’s largest retailer of natural and organic foods, has done a remarkable job of focusing on the customer motivation of caring. The idea of good food for good people and a good earth underlines the caring quality of the company and how it achieves this goal.

This experience is a key to the customer’s motivation. The emotional value is so great that the customer is willing to pay more for it. In paying more for caring, the consumers underlying expectation is to be treated in alignment to that intention.

Whole Foods Caring For Customers

Another aspect of the Whole Foods approach focuses on its authenticity and honesty in customer relations. There is a powerful element embedded in the idea that Whole Foods is in competition with the big grocery food chains that do not care enough about their customers.

Caring is also evident in the products or services customers engage in as part of their lifelong journey of self-actualization. The result is self-discovery and self-acceptance.

Often, such products or services offer philosophical approaches to life, ideas for living, and processes that customers use to reach their goals. As a result, the provider can often enjoy high-profit margins. People are willing to pay to care for themselves. What separates market leaders from their competitors is the ability to deliver through their product or service a uniqueness that differentiates them from the rest. To accomplish this means answering the question, “Why is the customer spending money with us rather than our competitors?”

The three customer motivations help us understand the sources of a customer’s emotional desire to buy and offer insight into what separates the winners from their competitors.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com

THE THREE CUSTOMER MOTIVATIONS: PART TWO

In addition to attention, one of the three motivators that we all share as customers is an expectation of brand competency. We expect providers of products or services to be competent both in creating and delivering whatever it is we’re buying.

Beginning with the design and engineering that goes into a product and continuing with how it is delivered, we expect a level of reliability and quality that reflects the provider’s competency. From the person making the sale to the delivery person handing us the product to the person on the phone (or online) helping fix a problem, we expect competency.

If we purchase using an automated or technology-based process, such as a website or telephone-based system, we expect that system to be designed in a customer-oriented and competent manner, allowing us to be successful.

Business competency affects customers perceptions of their own competency

A customer’s trust in the provider’s competency and the quality of a product or service is a direct reflection of the customer’s competency in making the decision to buy a particular product or service.

When customers make a good decision, they feel competent and conclude that they made the right choice. When customers feel they made a bad choice or decision, they feel incompetent. They then experience the anxiety that accompanies the embarrassment of making the wrong choice. The customer may even feel stupid, which is not a good outcome for anyone.

For the customer, status relates to competence.

The example of BMW

BMW is considered one of the most competent engineering companies in the world. BMW does not sell a car. It sells the “ultimate driving machine.”

The intention is to communicate that a BMW, through advanced engineering and design and the quality embedded in its manufacture, goes far beyond the expectations of other cars. It is much better than the average car.

To the customer, this easily translates to, “I am not your average guy.”

First, being able to afford a BMW demonstrates the owners’ competence. Second, ownership shows they are smart enough to know and drive a great car. Third, they are able to drive such a high-performing machine properly because they are competent drivers.

Drivers of BMWs often argue emotionally in support of BMW’s quality and craftsmanship and, thus indirectly, in support of their own competency.

When the expected competency is not provided, customers are naturally disappointed and resent the provider for letting them down.

We question whether we were incompetent in making the buying decision. We make comparisons about the quality, appearance, and associated pricing because we want to get the best value for our dollar. Making the best value for our dollar makes us feel competent and in control. If we are fooled or make a bad decision, we no longer feel competent. That is why we strive for predictable outcomes.

Every product or service must reach a bar that represents the level of competency that the customer expects. It is a source of trust between the business and its customers. Brand competency shows up in quality, know-how, expertise, reliability, sound advice, customer service, and durability.

All businesses must pay attention to competency as a motivator and always strive to meet that expectation. In order for them to feel competent, customers need to feel secure and trust in your competency. It is often at the center of why they are choosing to spend their money with you.

 

Edgar Papke is the co-author of Innovation By Design and author of True Alignment and The Elephant In The Boardroom. He helps leaders and their organizations align to create greater levels of innovation, performance, and fulfillment. He can be reached by email: edgar@edgarpapke.com