Tuesday, August 28, 2012

Strategic Planning Analogy #466: You’ve Got Personality

Over the past year or so, I’ve been splitting my time between looking for clients for my strategy consulting business and looking for a full-time strategy job.  This has given me the opportunity to talk to a lot of executives at a number of companies.

In the vast majority of cases, I eventually received a rejection.  Now, one might at first think that these rejections would make me feel more negative towards these companies.  After all, they rejected me.

However, just the opposite is true.  After meeting with the people at these companies, I like the companies a lot more.  I feel that I’ll be more likely to patronize them than before and I even feel a bit more loyal to them—even though they rejected me.

Before I met with these companies, they were just faceless, impersonal businesses—just words and numbers.  There wasn’t much of any reason to feel any personal connection with them.  But after I met and talked with people in the business, that all changed.  I got to see the people behind the company.  I got to hear the passion in the voices of the leaders.  I got to see people enthusiastically working at the company to do something great.  I got to see the awards in the lobby display cases, hear the chatter in the lunch room.

In other words, the company was no longer a faceless, impersonal entity.  Now it was a real living breathing entity with a personality.  I could feel the drive and the passion.  I could see there were people who cared.  Now I could relate to the business on a deeper, more personal level.  The emotional bonds became stronger, because now because there was a deeper connection.

Most businesses would be tickled to death if they could create these deeper, more loyal ties with their customers.   In my case, these great feelings continued in spite of being rejected.  Wouldn’t it be great if customers had such strong feelings towards your business that it could even overcome an occasional consumer disappointment?

In most businesses, it would not be practical to fly all of one’s customers to headquarters to talk to senior leadership about the business, like I was doing for interviews and business pitches.  But anything a company can do to move from being a faceless, impersonal entity to being a personality that customers can relate to is a move in the right direction.

The principle here is that the personality of the brand or company matters.  If done properly, it can help deepen the bonds between company and customers.  If done improperly, it can create an image that will turn people away from the company.  Therefore, as part of a strategic plan, one should consider the proper personality for the business and tactics for bringing it alive to the potential consumers.  The personality needs to be managed, just like any other asset.

Example: Best Buy
I first realized the importance of this fact when I was working at Best Buy.  I was shown some research Best Buy had done before my time there.  I believe the research was from the early to mid 1990s. 

The research was asking customers their opinions of the various consumer electronics retailers in the US.  At the time, there was a dozen or so regional retailers in this space who wanted to become national leaders.  It included retailers such as Circuit City, Silo, Highland, Fretter’s, Best Buy, and many others.  Today, all of them have long since disappeared—except for Best Buy.

Did Best Buy survive when others failed because consumers saw it as a far superior consumer electronics retailer?  This research at that time would say no.  In fact, consumers saw all of these retailers as pretty much the same.  On all of the rational variables of retailing (price, selection, etc.), all of the brands were rated fairly equally.  There wasn’t much of any reason to prefer one retail brand over the other.

As I say in my book “The Most Important Question,” one of the most important tasks of strategy is to discover and strengthen reasons for customers to naturally prefer your company or brand more than the alternatives.  In this case, the consumer electronics retailers were failing on this most important point.  There was no reason to prefer a particular store because they were seen as indistinguishable from each other.

That is, except for one little difference.  At that time, Best Buy had a person who would dress up in a costume which looked like a giant price tag.  This walking price tag would interact with customers in Best Buy’s advertising. 

According to the survey, people liked this giant walking price tag.  Why?  Because it helped give Best Buy a personality.  They liked the way it interacted with the customers.  It seemed to enjoy the same fun, entertaining things they did.  It had a personality as being like one of them.

In a sea of faceless competition, the personality which came from the giant Best Buy Tag gave customers deeper, more positive feelings towards Best Buy than towards any of the competitors.  It gave a reason to like Best Buy more, to prefer it.

Now I’m not claiming that all of Best Buy’s success was due to that giant price tag.  Success comes from doing a lot of things correctly.  But I do believe that the uniqueness of having a personality gave Best Buy an edge at a critical time when industry consolidation was about to occur.  It bought time in order for Best Buy to improve a lot of other variables, so that Best Buy could be the superior brand which survived the consolidation.  Without that personality edge, I am not sure Best Buy would have survived the transition.

Lately, however, Best Buy’s future seems to be under threat.  There are many reasons for that, and it will take many changes to return strength to the Best Buy brand.  But I am willing to bet that if you asked consumers to describe the personality of Best Buy today, you would get a lot of negative attributes.

Based on the chatter I read on the internet, Best Buy appears to have lost control over managing that personality.  It is being redefined by disgruntled customers in a negative way.  That is not a good thing.  Now Best Buy has to fight an additional war.  Not only does it need to fix the problem of becoming irrelevant in a changing marketplace, it needs to overcome a bad personality.  It would have been easier to transition to relevancy if it had the advantage of a likeable personality on its side.  Then people would be more forgiving during the transition, just as I liked companies even though they rejected me.

So how can we manage the personality for our benefit?

1.      First, think about personality strategically.  Decide which personality is most in sync with your strategic point of preference.  Figure out how to instill that personality into everything you do.

2.      Consider a more public profile for the leadership, so that they can bring their face and personality to an otherwise faceless firm.  Richard Branson is a great example of this.  His strong personality is very public and has helped give a strong personality to all of the Virgin divisions.

3.      In lieu of real employees, one can use symbolic representations to make the personality come to life.  This can be things as crazy as a giant price tag, or the Geico Gekko. 

4.      Actively manage your interactions with customers.  Some lowly sales clerk on the front lines may be the only human interaction a customer has with your firm.  If that clerk has a bad personality, it can reflect negatively on the entire brand, since it is the only human reference point.  Work to instill the proper personality into all employees based on the way you hire, the way you train, the way you reward.  Zappos provides a good example of this.  They were so intent on having a staff with the right personality that they only hire people with the personality which fits their culture and mission.  It  a huge part of the interview process.  To make sure employees are there for the mission and not just the money, after someone has been employed for a week they offer them $2000 if they want to leave.  That weeds out the people who only work for the money.
5.      Actively manage your interactions with society.  Society expects businesses to be good citizens.  They want you to give back.  This is particularly true with the younger adult generations.  If you are not seen as a good corporate citizen, it will damage your personality and you will lose business.

6.      React quickly to threats to your personality.   Monitor what people are saying about you.  As soon as your personality is being threatened, act to rectify the situation.  Don’t let little issues grow into big negatives.  Be fast and aggressive in protecting that reputation.  Cisco is a company which takes this very seriously and has developed tools to help others do the same.

Personalities help companies build stronger bonds with their customers.  These company/brand personalities need to be managed like any other strategic asset.  Incorporate personality development/management/protection into your strategic planning.

Ask the marketplace this question:  If my company were a person, what type of personality would it have?  You might be shocked at what you hear.




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