I read an article recently on Yahoo Finance about the Krispy Kreme donut company. That article reminded me of what so many companies don’t do—brand themselves from the inside out. They may have a great logo, a great message and even a great product, but are their internal operations aligned with the external image?
To illustrate this point, let’s take a look at Krispy Kreme. This donut chain has been wildly popular in the South since 1937. Its trademark product is a simple glazed donut made even more popular by the “hot” light outside the donuts shops. When that light is on, loyal followers (of which I am one!) know it’s time to get in line for hot, fresh glazed donuts (true confession: there is nothing like the taste of a fresh, hot Krispy Kreme donut!). In 1996, this southern secret launched to the rest of the world when Krispy Kreme debuted its first shop in New York City. New Yorkers responded just like southerners to these hot confections, and four years later the company went public.
What followed for Krispy Kreme was a series of internal debacles that nearly put the company out of business. Krispy Kreme expanded too fast and took on too much debt. Some franchises went bankrupt (in fact, many Krispy Kremes in the Dallas area where I live are closing). There were allegations of misconduct among its management. The list goes on and on. The stock that peaked at $49 a share in 2003 was hovering around $1 a share by 2009.
The external branding—image and message—were still strong, but what was going on internally did not align with the simplicity of a hot glazed donut. I cannot emphasize enough how important it is to synchronize a company’s brand personality with its corporate culture and values. Employees at all levels need to keep the brand in mind no matter what decisions they are making. In short, they need to live the brand.
How do you make that happen?
You start by having the marketing people work with the human resources people to ensure that the values associated with your company’s external image align with the values of your company. If your image is warm and fuzzy, your corporate culture should be, too. For example, at our credit union the H.R. and Marketing department report to the same person (they aren’t on opposite sides of the organization chart).
Hire people whose personalities match your corporate values. Employees must support the brand. If they don’t love what you’re selling, they won’t have love in their voice when they tell people where they work.
Constantly reinforce which values and behaviors are consistent with your brand. If your brand personality is humorous, show that in the way you design products and treat customers.
A successful brand does not start with a logo or a tag line. Those are external elements. Successful branding starts from the inside out.
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. – Sun Tzu (Chinese General, circa 500 BC)
Sun Tzu is exactly right. When it comes to competitive differentiation, it takes the right blend of strategy and tactics for success. I say the right blend, because many organizations spend too much time on strategy and tend to fizzle out when it comes to tactics. Why? Because we all know what we need to do, but we’re not always willing to do what it takes to get there.
Author David Maister refers to this as Strategy and the Fat Smoker. A fat smoker knows he or she should quit smoking, exercise, diet and lose weight. The resolve to do that, however, is not always there. Think about it. If it was that easy, there would be no drug addicts, alcoholics or bad marriages in the world.
Now let’s apply that theory to business. Strategy isn’t really rocket science. Every company competes on price, products and/or service. We all want to be the market leaders in our respective industries. We know what we need to do, but like the fat smoker, we don’t always have the resolve to do it. We’re not as willing as we think we are to step outside our comfort zones.
The real strategy lies in closing the gap between knowing and doing. It means spending less time conceptualizing and more time putting measurable actions into play. It means putting mechanisms in place that will ensure we are following up on our action plans. Much of what we do in the name of strategic planning is a about as effective as making New Year’s resolutions (in other words nice ideals for a few months but then little change by year-end).
The necessary outcome of strategic planning is not analytical insight. It’s resolve.
Here are a few quick tips about resolve when it comes to strategy and tactics:
· Make tough decisions. Don’t be afraid to offend someone, fire a low performer, go in a completely different direction or ruffle feathers. Is there a decision you know is best for your organization but you are afraid to pull the trigger?
· Set a deadline for every tactic. Be as specific and realistic as possible. And if a deadline is missed, there better be a darned good reason why.
· Assign responsibility for the plan’s overall execution. Someone needs to be the ultimate driver of your organization’s plan. Putting a name with the responsibility avoids ambiguity. And if multiple folks are involved it’s best to have one person as the primary so that people don’t look at each other when it comes to the deadline.
· Review the plan’s status on a regular basis. You need at least monthly updates on what is going on. Are we on track? Did some unforeseen circumstance cause a delay? If you are not going to monitor the plan then don’t expect it to work.
Effective planning is much more than just developing good ideas or a list of things to do in the upcoming year. Effective planning also means effective resolve.
How many hours did you spend trying to solve the Rubik’s Cube (personally I gave up after about an hour!)? Do you remember the Cabbage Patch Kids? Did you ever own a Pet Rock?
Like all fads, the Rubik’s Cube, Pet Rock and Cabbage Patch hype eventually died down and were replaced by other short-term crazes. That’s the difference between a fad and a trend. A fad is something that causes great enthusiasm but is short lived. It usually goes out as fast as it comes in. A trend is something that grows in popularity over time while significantly impacting the way people live and work. It’s a product or service that everyone uses and seems to make others obsolete.
Cell phones are a classic example of a trend. The first ones were not popular at all. They had cords, resembled regular house phones and were built in to luxury cars like Cadillacs and Mercedes. You could only use them in the vehicle and could not call beyond a certain range. In the 1990s, as technology evolved rapidly, cell phones got smaller and cheaper and service got better. By 2000, just about everyone had one—even teenagers. Today, cell phones do almost everything except cook your dinner. In many households, they have replaced land lines. Cell phones have changed the way people live and do business.
Spotting a Trend
It’s easy to spot and differentiate a fad from a trend years down the road, but how do we recognize them and know the difference before they reach their tipping point? Here are some suggestions:
Ask Questions. Is this something that will change the way people work or live long-term and how? Is it something you, your children and grandchildren will need or benefit from? How replaceable (or irreplaceable) is it?
Gage Enthusiasm. Fads come and go quickly with high levels of enthusiasm. Trends grow in popularity over time.
Do research. Read blogs, e-zines, newspaper articles, interviews with field experts or early adopters. You can never have too much information.
Don’t Rush. Learn from others’ mistakes. Being first to market with a product or service doesn’t make it a trend. Impacting customers and markets does.
Know Your Members/Customers. Sometimes you have to know what they want before they want it. Keeping in touch with your members and understanding their needs is key.
Test It. If possible, use the new gadget, gizmo, or technology yourself. Don’t criticize people who are doing something new until you’ve tried it (you may just fall in love with it).
Use the trend-spotting tips above and play the trend/fad game with the following issues:
· Text alerts
· Account to account transfers
· Search engine optimization
· Digital newspapers
When crafting a business strategy, it’s imperative to understand the difference between trends and fads. Without that knowledge, we risk making business decisions that are not in the best interest of our credit unions and our members.
Hopefully using these tips helps spotting trends easier than solving the Rubik’s Cube.