?>
How Left-Brain Management got us into this Recession
Now it is time to listen to
Right-Brain Marketing to help get us out.
Top 5 Reasons Management got us into this Recession:
1. Management is focused on reality, when the real problem is perception.
Bob Lutz, global product development chief at General Motors, recently said that the company’s Saturn brand probably won’t survive. “We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized.”
That’s the reality, but what’s the perception? Ask anyone “What’s a Saturn?” and you’ll probably get a blank stare.
Oddly enough, Saturn did have a favorable perception as an inexpensive, entry-level car. Four years after its introduction, Saturn reached its high-level mark selling 286,003 vehicles in the U.S. market. Last year Saturn’s “no-excuses product lineup” managed to sell only 188,004 vehicles.
2. Management is focused on expansion when the real opportunity is contraction.
Initially Saturn was available in one model only, the “S” series, although you could have it in a two-door, a four-door or a hatchback version.
So what did Saturn management do next? They expanded the line to include a larger, more expensive Saturn, the “L” series. That was the first step in the long decline of the Saturn brand.
Today, of course, Saturn has five models: Outlook, an 8-passenger crossover. Sky, a sports car. Astra, a compact sedan. Vue, a compact SUV. And Aura, a midsize sedan.
When Saturn was introduced, it was the only U.S. automobile brand available in one-model only. Its enormous initial success should have convinced General Motors that you build brands with a narrow line, not a full line.
3. Management demands “better” products when the real opportunity is “different” products.
Both Sony and Microsoft introduced videogame consoles that were vastly more powerful than their previous products. So who won the videogame battle?
The Nintendo Wii, a far-less powerful product, but one with a difference. The controller, a wireless motion-sensing remote that has revolutionized the videogame industry.
When Red Bull arrived in its unique 8.3-oz can, every major beverage company tried to introduce “better” 8.3-oz energy drinks. Except Monster which was introduced in a 16-oz. can and rapidly became a strong No.2 brand.
4. Management expects rapid growth when the real opportunity lies in the opposite direction.
Almost every powerful brand started slowly. It took Red Bull 9 years to break $100 million in sales. It took Microsoft 10 years to break $100 million in sales. It took Starbucks 11 years to break $100 million in sales. It took Wal-Mart 14 years to break $100 million in sales.
Too often, management tries to accelerate this process with massive up-front marketing expenditures. Take Webvan, for example, the first Internet grocery store. The company opened up in eight with a multi-million-dollar marketing campaign. Two years later, Webvan folded, losing $800 million.
On the other hand, FreshDirect started slowly in New York City only. Today, FreshDirect does $200 million in annual sales and is profitable.
And look at the fiscal disasters of Sirius and XM Satellite Radio. Both were launched with massive marketing campaigns and massive upfront talent investments ($50 million a year to Howard Stern, for example.)
A slow, but steady growth might have made a big difference.
5. Management values “creativity” when the real opportunity lies in “credentials.”
Take Tropicana’s recent redesign of its packaging. The new design might have been clever and creative, but consumers rebelled. “It doesn’t look like Tropicana anymore.” As a result, PepsiCo backtracked and agreed to bring back the original packaging.
A leading brand, over many decades, tends to become accepted as the only authentic brand in the category. The original. The real thing.
Kellogg’s corn flakes. Heinz ketchup. Tabasco pepper sauce. Campbell’s soup. Tide detergent. Kleenex tissue. Hertz rent-a-cars. Duracell batteries.
When you change the look of the brand, consumers get nervous. Did the company change the product, too? If not, why did they change the packaging.
You can’t separate the product from the package. The classic Coke bottle reinforces the authenticity of the brand.
Why does management continue to make the same mistakes?
Because they are logical thinkers. Cleverness, rapid growth, better products, expansion and reality are all logical ideas. They just don’t happen to work in marketing.
Actually there are two kinds of thinkers: Left brainers and right brainers. Left brainers are verbal, logical, analytical. They tend to be extroverts and good talkers. Right brainers are visual, intuitive, holistic. They tend to be introverts and good writers.
Now what do you suppose the boardrooms of corporate America are loaded with?
Left brainers, of course.
The vast majority of managers in America today are talkers rather than writers. Extroverts rather than introverts. Why is this so? Because of the way people move up the ladder in the corporate world. There’s an old saying: You don’t get promoted, you get elected.
Management is like politics. Your fellow workers determine who they would like to work for. Left-brain extroverts are particularly good at schmoozing with people. Right-brain introverts are totally outclassed when it comes to office politics.
As companies grow up and get bigger, their upper levels tend to be staffed almost exclusively with left brainers. As a result, the innovators (primarily right brainers) tend to leave or get pushed out. Like Steve Jobs who was effectively fired from Apple before returning to lead the company to staggering successes.
In spite of their absence from most boardrooms, it’s the entrepreneurs who have contributed the most to the U.S. economy. People like Bill Gates, Michael Dell, Howard Schultz and hundreds of others.
Did you ever wonder why almost every successful new brand was launched by an entrepreneur and not by an established company?
Amazon.com was not launched by Barnes & Noble, the world’s largest bookstore chain, but by Jeff Bezos, an entrepreneur with no experience selling books.
Southwest Airlines was not launched by any of the major carriers, but by Herb Kelleher, an entrepreneur with no experience in the airline industry.
Google was not launched by any major media company, but by Larry Page and Sergey Brin, two Stanford Ph.D. students.
Both The Coca-Cola Company and PepsiCo, Inc. are more than 100 years old, yet neither company introduced the new brands that would become leaders in the soft-drink categories. Red Bull, Snapple, Gatorade, Dr Pepper and Mountain Dew were all introduced by entrepreneurs. Entrepreneurs who were right brain thinkers and understood marketing.
To get us out of this economic crisis our corporate leaders to understand marketing and take advice from the right brainers in the boardroom.
More of the same left brain thinking is not going to fix GM or Citibank. Now is the time to let the right brainers help clean up this mess and get companies, brands and our country get back on the right track.
Watch this video to find out more about the War going on in the Boardroom.
Check this out! Readers of Advertising Age choose Positioning as
the Best Book Ever on Marketing!
Coming in at #3 was The 22 Immutable Laws of Branding.
Do you live in Atlanta? Well you are in luck! I’ll be speaking at an
Atlanta Ad Club & Atlanta AMA meeting on Wednesday, March 11th.
Register today. Both Al & I will be signing books.
Have you checked out the all new Ries.com? It is awesome. Visit us today.
Have you read War in the Boardroom? If so, get over to Amazon or BN.com and write a review today. We are counting on you to help us get the word out. We certainly won’t be doing any advertising, we are only doing PR. So if you are interested in an interview or inviting me to make a speech contact me today.
And if you haven’t taken our quiz check it out today. You may be surprised by the results.