Back in 1969, the world went wild trying to unravel one of the biggest hoaxes in pop culture history. A number of people started playing the music of the Beatles backwards. They also started looking at the Beatles album covers backwards in the mirror. When they did so, there appeared to be clues indicating that bass player Paul McCartney was dead.
Many of these hidden messages in the music and hidden symbols on the album covers could only be detected if you looked at them backwards. Although the Beatles deny the existence of such a hoax, there seemed to be far too many clues to make this completely random.
Strategies are based upon choosing a position in the marketplace. The position stands as a guidepost, pointing the direction in which the company is to move. It should describe the manner in which the company is going to win in the marketplace, and why certain consumer segments should prefer it.
When choosing a position, it should not only be able to tell you the right things to do. It should also tell you what are the wrong things to do, things which are inconsistent with your strategy.
Unfortunately, many companies develop mission statements and other such strategic documents that are nothing more than platitudes. They talk of noble goals, such as making money, or being a leader, or of enriching lives, but they are worthless at providing any sort of strategic direction.
One way to tell if your positioning is truly strategic or merely a platitude is to play it backwards, similar to what people did to the Beatles music. For example, if your statement says that your mission is to make money, play it backwards and the reverse would say that your mission is to lose money. Since people rarely go into business to lose money, this is not really a viable option. Therefore, if the opposite is not viable, then the original is just a platitude.
The same could be said about mission statements around “being a leader” or “enriching lives.” Playing it backwards, it does not seem to be viable to have a position of “being a loser” or “hurting lives.” Thus, these are platitudes as well.
If all you hear when you play your statement backwards are non-viable options, then your mission is just a meaningless platitude. And if that is the case, then maybe there is a hidden message in your statement about your pending death as well.
The principle here revolves around making choices and trade-offs. Rarely is a company strong enough to be all things to all people. And even if you were strong enough to be all things to all people, the consumers may still reject you because they favor being served by specialists, rather than generalists.
Therefore, companies need to make trade-offs—emphasizing certain benefits while deemphasizing others. For example, Wal-Mart has a position which revolves around providing the lowest prices. To succeed in providing the lowest possible prices, Wal-Mart has to make some trade offs. For example, Wal-Mart is not known for its service. If Wal-Mart added too much service, it could no longer afford to provide its low prices.
Harvard Professor and strategic expert Michael Porter says that one of the most important tasks of strategy is to determine which trade-offs you are going to make so that you can stand out and win in a particular direction.
If your position is based on a clear understanding of your trade-offs, then it will provide clear direction on what you are to do. When you play it backwards, you can tell that it is not just a platitude. For example, if you play backwards the Wal-Mart strategy, it would say that you are not going to win based on low prices. Is that a viable strategy? Of course it is. There are many companies that succeed by making a different set of trade-offs in order to win based on service, or convenience, or quality, etc.
Unfortunately, the trap of thinking in terms of platitudes rather than trade-offs is very common. So common, in fact, that it is often made fun of in Dilbert cartoons. In his book, The Dilbert Principle, Scott Adams defines the mission statement as “a long, awkward sentence that demonstrates management’s inability to think clearly.” Two of his parodies showing how useless a platitude-rich vision statement can be are as follows:
• “We enhance stockholder value through strategic business initiatives by empowered employees working in new team paradigms.”
• “We will produce the highest quality products, using empowered team dynamics in a new Total Quality paradigm until we become the industry leader.”
After reading those statements, could you tell anyone…
…What field of business the firm is operating in?
…What solution is being provided?
…How that solution is superior to other alternatives
and why some people would prefer it?
…What trade-offs are being made to win with this solution?
You cannot be motivated to act in a certain manner unless you first understand what you are supposed to be doing (and via trade-offs, know what you aren’t supposed to be emphasizing).
Fortune magazine once did a parody of bad vision statements by providing a universal multiple choice vision statement. It went as follows:
TO BE A…
a)Premier; leading; preeminent; world class; growing
COMPANY THAT PROVIDES…
b)Innovative; cost-effective; focused; diversified; high quality
c)Products; services; products and services
d)Serve the global marketplace; create shareholder value; fulfill our covenants with our stakeholder; delight our customers
IN THE RAPIDLY CHANGING…
e)Information solutions; business solutions; consumer-solutions; financial-solutions
Platitudes do not provide direction. They say you want to lead, but they don’t show the way. Platitudes do not inspire. Platitudes don’t tell people how to make trade-offs. Platitudes do not tell you how to differentiate yourself from other firms who have the same platitudes.
A better fill-in-the-blanks option would be as follows:
When it comes to solving the problem of ____________, I will win by owning the solution which places the highest priority on _______________, and I will make the appropriate trade-offs to remain a leader in this direction in the mind of the consumer who wants to make similar trade-offs to solve this problem.
A couple of retail examples could be as follows:
When it comes to the problem of feeding my family, I will win by owning the solution which places the highest priority on fresh, organic and healthy foods, and I will make the appropriate trade-offs to remain a leader in this direction in the mind of the consumer who wants to make similar trade-offs to solve this problem. (Could this describe someone like Whole Foods?)
When it comes to solving the problem of being appropriately dressed for work, I will win by owning the solution which places the highest priority on quality classic tailoring which lasts beyond one fashion season, and I will make the appropriate trade-offs to remain a leader in this direction in the mind of the consumer who wants to make similar trade-offs to solve this problem. (Could this describe a portion of what Talbots is trying to do?)
When it comes to solving the problem of providing my family with the everyday necessities of life, I will win by owning the solution which places the highest priority on paying the lowest prices in a one-stop shopping environment, and I will make the appropriate trade-offs to remain a leader in this direction in the mind of the consumer who wants to make similar trade-offs to solve this problem. (Could this describe a Wal-Mart Supercenter?)
Now aren’t these statements more practical than a set of platititudes?
For a strategy to be useful, it must provide direction. Platitudes do not provide direction. The way to tell if you have a platitude is to play it backwards. If it doesn’t make sense in reverse, then it is a platitude. Good strategies show the trade-offs one is willing to make in order to win in a particular direction. When you play that backwards, what you see are other ways to make a different set of trade-offs.
Not everyone wants to make the same set of trade-offs to solve a problem. Therefore, when you are choosing the trade-offs for your firm, you are not only making choices about what you are providing, but also who you are providing them to. When making trade-offs, you are going to make some people unhappy with what you are doing. But as long as there are enough people who want to make the same trade-offs as you do, that’s okay.