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“A company can grow big without losing the passion and personality that built it, but only if it’s driven by values and by people, not by profits.” — Howard Schultz


Earlier this month I was talking with a regional franchise chain with aspirations to grow big… really BIG. But they want to grow BIG without losing their soul. Easier said than done.

That conversation reminded me of the growth issue we faced at Starbucks in the late 1990s. At that time, Starbucks was fast approaching 2,000 locations. That’s BIG by most standards but Starbucks dreamed bigger and that dream has become reality as Starbucks now operates over 21,000 shops in 63 countries.

Starbucks has truly become a Goliath’s Goliath.

In my love story book about Starbucks, I shared the mentality of how Starbucks was able to still view itself as an upstart David even though they had become a monolithic Goliath.

If your business is caught in the strategic crosshairs of needing to get bigger but remain smaller, the following excerpt from TRIBAL KNOWLEDGE might provide you with boardroom fodder. Enjoy…


TRIBAL TRUTH #17

A Goliath Can Become a David Again

TribalKnowledge_150There is a life-cycle model called the Sigmoid Curve, an S leaning forward, that describes the stumbling beginning, fast rise, glorious peak, and slow decline of every successful business, brand, or even idea. Management guru and author Charles Handy discussed this model in his book, The Age of Paradox, and pointed out that the right time to create a new idea, start a new curve, is when you are approaching the apex, not once you have passed it—for once you start down the other side of that curve, it may be too late.

Sounds simple, but how to do that in the real world? Once you’re on your way to becoming a Goliath, do you really want to go through being a David again? It may be more romantic, but let’s remember, David was the underdog—and for good reason. But if you settle into the summit of the curve, you’re a Goliath just waiting for the next David to come along and knock you off your perch.

Starbucks long outgrew being the David of the specialty coffee industry and became its Goliath. The company dwarfs all specialty coffee competitors in market share and customer mind share. However, Starbucks refuses to settle into the role of being a coffee Goliath. It will not consider itself a Goliath because it no longer considers other coffee retailers as its competition.

Starbucks began with the mission of wanting to get the world to appreciate better tasting coffee. To put it simply, Starbucks has accomplished this mission. With the popularity and sustainability of the company, the next step is to make the transition from Starbucks as coffee “brand” to Starbucks as beverage “icon.” From this perspective, Starbucks is an upstart, competing against the old-school beverage icons like Coke and Pepsi. Starbucks considers itself a David because, compared to Goliath-proportioned Pepsico’s $66 billion and Coke’s $47 billion yearly revenues, its annual $15 billion is small in the megalithic beverage industry machine.

So what is Starbucks doing to step up to its new self-imposed competitors? One way is to look to other brand icons for ideas. Take Coke’s Diet Black Cherry Vanilla Coke® beverage and compare that to the Starbucks Marble Mocha Macchiato. Both rely on what started as a specialized drink (Vanilla Coke® and a Caramel Macchiato), and then grew into enhanced versions of themselves. And, taking a page from iconic McDonald’s and its “limited-time only” specials like the McRib® and the Shamrock Shake®, Starbucks has introduced promotional holiday beverages. Drinks like the Pumpkin Spice Latte and the Peppermint Mocha bring a higher price point and add some zest to the usual menu offerings for customers, and that translates into driving higher year-over-year sales at Starbucks.

Sure, borrowing some sales gimmicks from the large competitors works to some extent, but Starbucks didn’t get where it is today by following. Its brand is strong because it is the leader in the specialty coffee industry, and it led because of the passion its people had for the product. To transition to icon status will take hard work, significant investment, and continued passion. Upping the ante, going up against the Goliaths on a bigger stage, gets company adrenaline flowing. It motivates employees to keep a competitive edge, especially when the competition has changed. Nobody roots for Goliath. Most everybody roots for David. The best companies have their own employees rooting for them. Getting bigger by positioning itself as being smaller can rally customers and employees alike.

Starbucks’ success turned itself into a Goliath, and now it has redefined and repositioned itself against a bigger Goliath in order to become a David again—a position Starbucks feels much more motivated operating under.

Leading Questions…

  • Who are the Goliaths and the Davids within your company’s competitive set?
  • How must your business change to maintain its upstart David mentality no matter how big your business gets?

  • Originally posted on December 31, 2004

    Bruce Mau, a designer, thinker, articulator, and massive change provocateur, has a lot of ideas on a lot of things. His Incomplete Manifesto for Growth is a list, an incomplete one at that, of 43 ideas to get you beyond thinking differently but doing differently.

    As 2014 turns to 2015, the message of doing differently is one we should all heed. The first incomplete ideal is featured below. Heed and enjoy.


    In 2010, I wrote TOUGH LOVE, a business book masquerading as a screenplay.

    It’s a business book but really… it’s a script that reads just like a Hollywood screenplay with standard script format, seven main characters and two plot lines.

    TOUGH LOVE tells the story of how a rags-to-riches entrepreneur finds success building a company (Galaxy Coffee) to be bigger only to realize, the hard way, that smaller is better. Inserted throughout the TOUGH LOVE script are breakout business lessons and thought-provoking business advice geared towards entrepreneurs and small business owners.

    TOUGH LOVE has been available primarily as a $9.99 digital download. However, it’s now available as a free download.

    Go ahead… download it, read it and share it. My gift to you. Happy Holidays y’all.


    PDF DOWNLOAD:

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    VIEW and READ ONLINE:

    TOUGH LOVE: Scripting the Drive, Drama and Decline of Galaxy Coffee

    Creating Difference

    the following post first appeared on the Brains on Fire blog

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    Bernadette Jiwa is a kindred sprit to us at Brains on Fire. She thinks like we think. Her book, DIFFERENCE, is comfort food to us because she understands that “marketing is, and has always been, a transfer of emotion.”

    We dedicated lots of pages in our book to explaining how the best marketing is about loving people and if you don’t love people then get out of marketing. We also make a plea for businesses to understand that the passion conversation isn’t about getting people to talk about YOU, the brand. Instead, it’s about getting people to talk about themselves and how they have become better people because YOU, the brand, emotionally connected with them.

    DIFFERENCE is of the same spirit. It’s a manifesto urging marketers to go beyond developing products and programs that are not just different, but more importantly… create a difference in people’s lives.

    Bernadette explains,

    “You can’t build a great business just by being different. You need to create ideas and experiences that give people reasons to care and to belong, not just the reason to choose.

    What makes a brand unique today is the difference it creates—how it affects peoples lives and becomes part of their story. When you are organized to create difference, not just be different, the result is much harder to replicate.”

    To help businesses develop empathy-driven strategies that result in making a difference in the lives of customers, Bernadette shares a step-by-step framework called, The Difference Map. This framework starts with finding the fundamental truth about the people your business wants to impact and finishes with a pathway to develop products and programs that matter most to your customers. Click below to get started on creating a difference with the people your business loves.

    TheDifferenceMap_Bernadette_Jiwa

    As this year ends and next year begins, you’d be wise to read and follow Bernadette Jiwa’s advice in how to make a difference in the lives of people who love you… your customers.


    In late October I spoke to a roomful of restaurant marketers and shared a little known story about Whole Foods Market. This story has become a Whole Foods company campfire tale and for good reason… it’s a story that helped to shape the culture of the company in its early days.

    In this short video, you’ll hear a how passion plays a pivotal role in a business becoming a beloved brand. Enjoy…

    It was October of 1994, twenty years ago, when the trajectory of my life changed.

    I was living with my parents and back in school getting a second degree, this time in marketing. College loans helped to cover tuition but I needed a part-time job to cover other expenses like food (and my bar tab at the Barley House).

    Enter Starbucks Coffee.

    As a marketing student, I had heard of this upstart coffee chain but never stepped foot in one.

    Starbucks was holding a hiring fair at their meager Dallas training office tucked deep inside an office building. When I entered the windowless office I was handed a cup of House Blend. (I still remember how amazingly flavorful that cup of coffee tasted.) I filled out the job application and was immediately put into an interview.

    For most people a job interview is not a big deal, it’s just talking. But for someone who stutters, it’s a HUGE deal because… it is just talking. Some how I managed to minimize my stutter enough that it was a total non-issue.

    I was offered a barista job at Starbucks store #677 (Preston Center). That was October of 1994.

    A year later I was out of school and working as a Media Planner at an advertising agency in Dallas but I still kept working at Starbucks with a Saturday morning shift behind the bar slinging lattes.

    Frustrated with my job at the advertising agency, I abruptly quit. I became a vagabond barista picking up odd shifts at Starbucks locations all over Dallas.

    Then fate interrupted.

    Starbucks was growing so fast they couldn’t manage all of the local store marketing activities happening in the field by the small marketing team at corporate in Seattle. They created a field marketing department and Dallas was one of the first markets to get a zone marketing director.

    This marketing director, Lisa, needed help and I saw an internal job posting for a field marketing specialist. I sent my resume in and a few days later I had my job interview at the Creekwalk Village Starbucks in Plano.

    I vividly recall that interview. I dressed in a snazzy Banana Republic suit and carried a Coach leather bag with examples of my work as a Media Planner. When Lisa walked in, she saw me at the merchandise wall talking shop with Scott, the Creekwalk Village Starbucks store manager.

    Part of me believes when Lisa saw me talking shop with the store manager, she was able to envision me as a Starbucks field marketer. Much of that position was serving the needs of store managers by designing and implementing new store opening plans and creating local store marketing programs. Seeing me interact with a store manager gave Lisa confidence that I could represent her department well.

    A few days I was hired on as a Starbucks field marketing specialist.

    From there, I followed Lisa to working in the marketing department at Starbucks corporate. That experience led me to becoming the director of national marketing at Whole Foods. And that experience paved the way for me to publish TRIBAL KNOWLEDGE, which has led to a nice career as a marketing consultant.

    It’s only fitting that my Halloween costume this year honored how my life changed twenty years ago…

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    Plato. Purpose. Profits.

    Play-To_200The ancient philosopher Plato made significant contributions to humankind. His philosophical fingerprints can still be felt today in how we think about mathematics, science/nature, morals, politics and the arts.

    Perhaps it’s time we add “brand strategy” to the long list of contributions Plato has made to civilization.

    To explain “how great companies have great purposes,” the authors of CONSCIOUS CAPITALISM draw connections between Plato’s take on transcendental philosophy and modern-day brand strategy.

    In its most simplistic form, transcendental philosophy provides a framework for understanding how we, as humankind, can live a worthwhile life.

    Plato outlined three transcendental ideals to follow in order for people to make a meaningful contribution. These same ideals can be viewed from the perspective of a how a business can live the brand in a purposeful way to become profitable.

    These transcendental brand strategy ideals, as outlined in CONSCIOUS CAPITALISM, are: The Good, The Truth and The Beautiful.


    brand ideal # 1 | The Good

    Plato believed the power of The Good happens when people are in service to others by expressing love, compassion, and empathy. Flipped to the view of business and branding, The Good is all about helping people live a better life.

    The brand purpose of improving a person’s life through products and services is an everlasting ideal.

    Starbucks is an example of a business that follows The Good ideal. Starbucks success is built upon its desire to inspire and nurture the human spirit through the connectedness that comes with enjoying a simple cup of coffee.

    The Sleep Number brand also taps into the power of The Good by improving people’s lives through a better night’s sleep. (More importantly, there is no telling how many marriages the Sleep Number bed has saved.)

    The authors specifically mention The Container Store as an enduring brand that follows The Good strategy to success because the company helps people become happier by being more organized.


    brand ideal #2 | The Truth

    The unrelenting pursuit of understanding and fighting for justice and truth is a noble way to for a person to live. It’s also a noble pursuit for a brand to follow to find long-lasting success.

    Brands living for The Truth focus their efforts on correcting marketplace injustices.

    Southwest Airlines was founded upon the principle of righting the wrongs in airline travel from making it less expensive to fly to making the in-flight experience more humane and to eliminating add-on fees.

    Whole Foods Market has found long-lasting success by bringing The Truth in the form of only selling foods that are free from artificial ingredients, growth hormones, and anything else that’s fake.


    brand ideal #3 | The Beauty

    Lives are enriched when people pursue greatness to change the world for the better. Beauty is the by-product of such a pursuit.

    When brands follow The Beauty strategy path, they embark on a never-ending journey of continuous improvement to achieve excellence. A simple way for a business to follow this pathway is to take something people perceive as good and make it better.

    The authors highlight Apple as a quintessential Beauty brand because the company is focused on making “insanely great” products. Apple succeeds by taking what is already good and making it better. It made the PC computer better through its Macintosh (Mac) product platform. It made the mp3 player with its iPod lineup. Tablets existed before the iPad but the iPad greatly improved the tablet.


    It’s amazing to think how brilliantly the ancient transcendental philosophy from Plato works to help focus a business on its higher purpose.

    By focusing supremely on its true purpose, businesses can connect more emotionally (and rationally) with consumers, leading to being a profitable and quite possibly… a transcendent brand.

    The Container Store Manifesto

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    We conclude our series sharing summaries of principles The Container Store follows to achieve its long-lasting success with a manifesto.

    While not written as a manifesto, these words from page 25 of UNCONTAINABLE are inspirational, aspirational and actionable. Enjoy…



    The Container Store MANIFESTO

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    The Container Store posting series:

  • Hiring (Oct. 13)
  • Training (Oct. 14)
  • Selling (Oct. 15)
  • Leadership (Oct. 20)
  • Vendor Relations (Oct. 21)
  • Retailing (Oct. 22)
  • Manifesto (Oct. 23)
  • The Container Store Retailing Philosophy

    We continue our series sharing summaries of principles The Container Store follows to achieve its long-lasting success. These principles are detailed in the book, UNCONTAINABLE, written by Kip Tindell (co-founder, ceo and chairman, The Container Store).


    The Container Store Retailing Philosophy

    uncontainable_150Kip Tindell shares a great story in the book about a conversation he had with retailing pioneer Stanley Marcus of Neiman-Marcus fame. They were discussing the importance of a retail business having the right mix of products, service and price.

    Kip recalls the conversation…

    I loved to talk with Stanley Marcus about selection, service, and price. Stanley always said that if you do one of these things really well, you’ll be very successful. He said if you do any two of them well, you’ll have the number one business in your niche. Then he said you can’t do all three because price is absolutely mutually exclusive to both selection and service.”

    The best products with the best service at the best possible price is nearly impossible to do.

    Zappos can lay claim to selling the best products with the best customer service but not at the lowest price.

    Costco competes brilliantly on selling products at a very low price but that comes at a cost. They do not have the best selection nor do they have the best customer service.

    The Container Store would love to, in Kip’s words, “… hit the triple crown every day—offering a well-edited, carefully curated collection of 10,000 products, free expert advice and service that customers delight in, and prices competitive with the mass merchants.” But they can’t.

    The Container Store can deliver the best products with the best customer service, but not at the best price.

    As a former retail marketer for Whole Foods and Starbucks, I know firsthand the struggles dealing with price perception issues. Whole Foods especially struggles with the perception its prices are too high. It’s true that one can buy cheaper natural/organic food elsewhere and one can buy a cheaper latte from someplace other than Starbucks. However, Whole Foods and Starbucks have found retail success by not competing on lowest prices.

    I really like Kip’s perspective on a retailer competing with higher prices. Kip writes…

    We’re not the only retailer that gets an unfair reputation when it comes to price. But it’s the retailers that focus solely on price that get the credit for great pricing. And it’s surprising to me how overcredited discounters are for pricing and how unfairly retailers who focus on service and quality are marked as overpriced.”

    The Container Store, Starbucks and Whole Foods all suffer from being known as too pricey. However, these higher prices result in better products with better customer service. If I’m starting a retail business, I’d focus on delivering better products and service. Yes, prices will be higher but the overall experience will be richer.


    The Container Store posting series:

  • Hiring (Oct. 13)
  • Training (Oct. 14)
  • Selling (Oct. 15)
  • Leadership (Oct. 20)
  • Vendor Relations (Oct. 21)
  • Retailing (Oct. 22)
  • Manifesto (Oct. 23)
  • The Container Store Vendor Relations Philosophy

    We continue our series sharing summaries of principles The Container Store follows to achieve its long-lasting success. These principles are detailed in the book, UNCONTAINABLE, written by Kip Tindell (co-founder, ceo and chairman, The Container Store).


    The Container Store Vendor Relations Philosophy

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    Kip Tindell gives credit to the strong vendor relationships The Container Store has developed as a major reason the company has thrived for three decades.

    In the early days of the company, The Container Store worked with other mom and pop shops. These small vendors were accustomed to big box retailers making demands and dictating how the vendor/retailer relationship would work. Kip recalls how these small vendors were astonished when The Container Store took a genuine interest in their success.

    The Container Store takes the time to understand the needs of it vendors and works directly with them to form a mutually beneficial relationship.

    The Elfa closet shelving system is the best-selling product at The Container Store. It’s a product Kip recalls as being very challenging to sell because it’s difficult to understand how to use it. However, once you learn how to use it, it becomes a simply elegant way to organize a closet. Other retailers refused to sell the Elfa product because it would require too much employee training. The Container Store didn’t shy away from the employee training needed and embraced the Elfa product to the degree that it is by far its most popular product.

    The Elfa brand and business would never have been realized if The Container Store didn’t develop a strong vendor/retailer relationship. This strong relationship resulted in Elfa being purchased by The Container Store in 1999.

    Most of the products sold in The Container Store are either proprietary or exclusive. This truly requires a strong vendor/retailer relationship where The Container Store needs to understand how these vendors define success so that everyone wins.

    With its runaway success, The Container Store saw lots of competitors trying to mimic it business. Local, regional and national chains have all tried to replicate The Container Store business model. None have been able to find the same success and most of these competitors have ceased to exist.

    Why didn’t these competitors successfully knockoff The Container Store?

    Kip Tindell rightfully believes, “You can copy a company two-dimensionally, but you can’t copy its heart and soul. That, to me, is the key. No one wants to build a business that’s so hiring- and training- and people-intensive. That’s usually the last thing people want to deal with in business.


    The Container Store posting series:

  • Hiring (Oct. 13)
  • Training (Oct. 14)
  • Selling (Oct. 15)
  • Leadership (Oct. 20)
  • Vendor Relations (Oct. 21)
  • Retailing (Oct. 22)
  • Manifesto (Oct. 23)