A Very "Different" Harvard Professor
Posted on Harvard Business Review: May 3, 2010 11:01 AM
Harvard Business School professor Youngme Moon has emerged as one of the world's compelling voices on the future of strategy, competition, and brands. She teaches one of HBS's most popular courses, she has written some of its best-selling case studies, and, a few years ago, she co-authored one of the most provocative articles that HBR has published in years. So it's no surprise that her new book, Different, is both refreshing in its honesty and challenging in its implications for established companies (and cautious leaders) in all sorts of industries.
Professor Moon's message is as simple as it is powerful: Most companies, in most industries, have a kind of tunnel vision. They chase the same opportunities that every other company is chasing, they miss the same opportunities that everyone else is missing. It's the companies and brands that see a different game that win big—but all too often, the big companies in a field see things exactly the same way.
"In category after category," she writes, "companies have gotten so locked into a particular cadence of competition that they appear to have lost sight of their mandate—which is to create meaningful grooves of separation from one another. Consequently, the harder they compete, the less differentiated they become ...Products are no longer competing against each other; they are collapsing into each other in the minds of anyone who consumes them."
It's hard to argue with this insight. It always feels risky, and at times it can feel downright scary, to start from scratch and do something new, whether it's launching an entrepreneurial venture or championing a game-changing venture inside an established organization. There are so many uncertainties, so many variables, so much that can go wrong, especially in an environment with so little room for error. But when it comes to thriving in an age of widespread uncertainty and rapid-fire innovation, the only thing more worrisome than the prospect of too much experimentation and change may be the reality of too little experimentation and change. There are too many competitors chasing too few customers with products and services that look too much alike.
That's what occurred to me a few years ago as I listened in on one of those hush-hush, invitation-only conferences for CEOs and top executives. This conference was for leaders of regional banks across the United States. The setting was beautiful, but the mood was somber. Much of the talk was about tough the business had become: Credit markets were wreaking havoc with profit margins; acquisitions were creating a handful of giants that were putting the squeeze on mid-sized rivals; customers had become demanding, fickle, impossible to please. (This was, by the way, well before the worldwide financial meltdown, back when bankers thought TARP was what groundskeepers used to cover an infield during a rain delay.) There were lots of bankers, with lots of problems, looking for sympathy from one another.
It was enough to make me, as an outsider, feel sympathetic too, until one industry insider explained an overlooked source of the bankers' pain. This market-research guru runs a firm that has conducted thousands of "mystery shops" and interviews with front-line employees at retail banks. He told the executives that during their visits, his firm's researchers always ask bank employees one question: "As a customer, why should I choose your bank over the competition?" Two-thirds of the time, he reported, front-line employees have no meaningful answer. They either say nothing or they "make something up on the fly."
The bank executives seemed unsurprised. I was stunned. How can the leaders of any company expect to outperform the competition when their own people can't explain what makes them different from the competition and better than they've been in the past? That's the real problem with so many organizations today. It is also the huge opportunity for executives, entrepreneurs, and innovators of all stripes who are prepared to shake up their industries by doing something truly distinctive.
The most successful companies and leaders don't just try to outcompete their rivals at the margin. Instead, they aspire to redefine the terms of competition by embracing one-of-a-kind ideas in a world filled with me-too thinking. They aim to create what Professor Moon calls "idea brands," products and services whose performance and personality in the marketplace challenges the limits and assumptions of entire categories. Cirque du Soleil is an idea brand, a circus that reimagined what a circus could be. So is Harley-Davidson, which invented the concept of the white-collar, weekend "biker outlaw." And Dove soap, whose Campaign for Real Beauty challenged preconceived ideas from the worlds of fashion and style.
"Idea brands are not perfect brands," Professor Moon warns. "Far from it. They are polarizing brands. They are lopsided brands. They are brands devoted to the skew ...They may not make much sense on paper, but they make perfect sense to us."
It all makes perfect sense to me. If you want to take the idea of "idea brands" seriously, ask yourself: If your company went out of business tomorrow, would anybody really miss it? I first heard this question from advertising legend Roy Spence, who says he got it from Jim Collins of Good to Great fame. Whatever the original source, it is worth taking seriously as a guide to what really matters in terms of strategy and marketing. Why might a company be missed? Because its products and services are so distinctive, its culture is so unique, and its mission is so compelling. Few organizations meet any of these criteria, which may be why so many companies feel like they're on the verge of going out of business.
Think about it: If you do things the same way everyone else in your field does things, why would you expect to do any better? Being different is what makes all the difference.
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