Success At What Cost?

Success is a bit of a paradox for the growing business says Robert Craven. On the one hand we seek the popularity and profits that go with it but on the other hand our product loses its intimacy with the success and our customers cease to get the individual attention that we were once able to give to them. He explains how to get the best of both worlds.

One formula for success revolves around the 'O-X-O/X-O-X' Principle.  With an Ordinary (O) system it doesn't matter how eXtraordinary (X) your people are; at the end of the day you will get Ordinary (O) results as the mediocrity of the system will inevitably dominate.

What you really want to achieve is an 'X-O-X' system.  An eXtraordinary system with Ordinary people will create extraordinary results. The 'X-O-X' system wins every time.  This is what fast food stores do - they put in place brilliant systems so that pretty ordinary folk can deliver extraordinary results.

The logical extension of this argument is as follows.  If you wish to grow your business, you should create an 'X-O-X' system.  If you get the systems right (and it can be run with the lowest common denominator in terms of employee skills) then it can be replicated.  In other words, you can clone your model, replicate it as many times as you wish.  This is what many franchise systems are based on.

The flaws in this argument are several.  For a start, this way of thinking requires you to take as much skill out of the job as possible, so that you are not dependent on the qualifications and skills in your people - so the model will not be effective for 'brain work'.  Secondly, it predetermines that you are more interested in dollars than offering a genuine service.  So, while this thinking may create a money machine, unfortunately most machines do not have hearts or souls!

If you hit upon a winning business formula, you have to make important choices. Should you expand, open another branch, franchise, license or what?

After all, if you've figured out a winning strategy, it seems only rational to cash in by letting the market have what it wants: more of you!  Lets play at devil's advocate.  As long as you're giving the market what it wants, what's the problem?  If some is good, isn't more better?

The moment you take your special, authentic, limited-edition product and leverage it, make it widely available and normal, the very people who loved it will inevitably rebel.

'Starbucks isn't what it used to be', they tell you. The early fans who made you successful in the first place turn on their heels when they smell that you're not authentic anymore.  'Before ubiquity (widespread popularity), when it seemed as if the product (or its creator) wasn't in it just for the money, somehow that felt more real, more wonderful, more authentic', they say.

Enter the demon or deity called marketing.  Brands, logos, salesmanship, positioning, and focus groups have become associated with corporate greed.  It seems to be part of a game where 'they' are trying to win something over on 'us'.  This mistrust of marketing comes from people's desire to have something real - and to get it from someone who isn't trying quite so hard to sell it.

So, the million dollar question is: 'Are we ever authentic?' 

A burger chain or an amusement park clearly doesn't provide an authentic experience.  It is a manufactured, designed, manipulated, processed experience aimed at maximising profit.  (Who cares?)

The source of the debate is that, as consumers, almost everything we experience has this lack of authenticity and sincerity.  As consumers we have been conned into these superficial relationships yet we remember and relish human contact. 

For instance, your local delicatessen gives you a better service (in most senses) than your supermarket.  An independently owned and run pub or bar can give you a better, more personal service than one owned by a large chain.  (Not always, but usually!)

Put simply, the great advantage that the smaller or independent business has is its ability to create something relatively genuine and sincere - something that the people who run the enterprise actually believe in.  When you discover that Irish bars or gay bars are simply part of a multinational drinks corporation that specialised in themed entertainment you realise that the whole experience is fake, shallow and insincere.  You may have enjoyed the event, but you have been conned.  ('Who cares?' you may argue!)

Why does the intention of the creator of a product have so much influence on our perception of the product, and hence how we as consumers value the product/experience?

For the bigger business, the issue is how to somehow re-instill the idea of adventure.  For smaller businesses, they are already halfway there - closer to the customer, closer to the products and closer to staff; the growing business really is in a position to genuinely touch its customers!

The paradox: Markets talk.  Word spreads.  When something is great, we all want it.  And if it is your product or service, isn't that a great feeling!

As consumers, we often want produce to be local and reasonably priced.  And we want reliability.  And yet, we want it to be just as good every time we experience it.

On the one hand, for something to be authentic, it needs to be rare and special and live.  On the other hand, what's the difference between the authentic and manufactured?

If you're lucky enough to create something authentic, you have real choices.  You need to decide how important it is to be real, how much of yourself you have tied up in the authentic experience that you've created.  Most of all, you need to decide what you'd like to do all day.

Some of us can be happy taking today's flavour and selling it like crazy. Others need to have a deeper relationship with their craft, something that establishes a connection between themselves and their product.

People who create something authentic but then sell out almost always end up unhappy.  Why?  Because once you sell out, any new success you have isn't because you are authentic.  You're in a new business now.  Would you be happy with that?

Before you pull the trigger and sell out and scale up, consider a few questions:

• Is it better to be big than to be (perceived as) real?
• Is spreading the word more important than being admired by a tiny coterie of truly devoted fans?
• Should financial rewards come to those who make good stuff for the masses?
• Could you be happy practising your authentic task for the rest of your life?

If you do get big, you won't be practising authenticity for the rest of your life.  When you sell out, you're making a trade-off. The big market wants reliability and conformity.  The big market probably won't reward you for being authentic.

To be hugely cynical, think authenticity.  If you can fake that, the rest will take care of itself.

Customers know when they are being conned.  You could argue that they get what they deserve, what they have asked for. 

This world of mediocrity, of insipid service and lack of attention to the detail that really matters gives the independent-minded business huge opportunities.

In almost every market, the dominance by the 'big boys' is resented.  In their search for reliability, conformity and profitability they almost always forget about the customer and the people that work at the business.  Nine times out of 10, the local business may not be cheaper but it can out-perform in terms of attention to service, detail, product knowledge, customer understanding.  So, the idea of a 'Campaign for Real Businesses' is not so half-baked. 

Large businesses cannot flex and respond and listen to the customer the way that a smaller business can.  The energy and enthusiasm and excitement that a smaller business can generate can make the simplest shopping task quite pleasurable.  In a world where service levels seems to be collapsing (despite the growth in meaningless and empty service level agreements and customer charters), the business that does really care and is really interested in doing great work can stand head and shoulders above the rest.

The question is whether you wish to rise to the challenge and how do you actually make this happen 24 hours a day, seven days a week!

Most consumers are more cash-rich and time-poor than ever before.  Increasingly, there is a real desire for intangible, service-based things rather than just products.  Consumers are tired of acquiring possessions and want more out of retail than just things.

The implications for the future are clear.  Services and experiences will become more in demand, maybe at the expense of spending on physical goods.  As a consequence, excellent frontline staff will become harder to find and keep.  What is more, the quality of service will become one of the key differentiators of success.