A Confederacy of Dunces

Between the third and fourth quarter of every year, I seem to get pulled into a lot of meetings where some executive has decided to assemble a think tank, planning committee, strategy group, or other impressively-named gaggle of people whom the organizer expects to do his thinking for him.  He has a desire to achieve something that can’t quite be called a “goal” because it is too nebulous and ill defined, so he brings together some people to turn it into some thing actionable.   And that is not necessarily a bad thing, but it seldom turns out well.

My sense is it’s largely because such groups attract people who want to be perceived as being thought leaders, but who don’t actually want to think or share their thoughts.   Being on a committee makes a person seem important, and all the more so if it has an impressive name.   So in any team/committee of twelve, about half the people are there just so they can put it on their annual review, but they contribute nothing at all to the discussion.  At best, they’re dead wood who remain completely silent – though they sometimes speak just so they can say they contributed something, and it’s usually something useless that detracts or at least distracts from the purpose of the group.

Others get involved to prevent progress from occurring.   They consider the group’s activities to be a threat to a status quo with which they are perfectly happy, and want to prevent the group from proposing any changes that will rock their pleasure-boat.   They bring a spirit of can’t-be-done, are quick to identify flaws without proposing solutions or alternate approaches, and it becomes clear that their participation is in the nature of a saboteur that simply wants to prevent the committee from working.  And since it’s much easier to destroy an idea than create one, must easier to feed doubt than grow enthusiasm, they often get their way.

Still others vaguely agree with the purpose, but they have a political agenda: they want to own what the committee creates.  While their contributions seem to be proposing alternate solutions, it becomes clear that every solution they propose merely increases their own power and authority by placing the control of the solution in their own department – whether or not it makes sense for the process to reside there.   This can be terribly distracting, because good solutions are scuttled in favor of less effective ones (which are not completely useless) that increase their political power - and because their interest is in having control rather than achieving results, it becomes obvious that the plan has little chance of success.

Similarly, there are those with alternate agendas that they have either failed to pursue or haven’t earnestly tried to pursue – but their agendas are similar enough to the objective of the group that they can divert the group’s discussions to their agenda.   What they are seeking is usually something worth doing, but it is not the purpose of the group and would be better handled by creating a separate work group to pursue so that these side-tracks do not become diversions from the main purpose of the group.

In all, a committee of twelve people usually has only three or four who are dedicated to the purpose and willing to contribute in a meaningful way.   And to make matters worse, the behavior of the non-contributors often alienates and demoralizes contributors to the point where they stop contributing, or find better things to do with their time.  I have noticed that it is difficult, to the point of being nearly impossible, to recruit smart and capable people to committees - their aftertastes of their past experience lingers on.

In the end, it’s my sense that these groups would be more productive if they were pruned down to those individuals who are earnest and capable.  A group of four intelligent and hard-working people can do more, and do better, than a committee of twenty people who lack those qualities.  But this never seems to be the case: a series of meetings is set up with the same group of people – the useless and the detractors are never cast out, the earnest ones leave in disgust, and new members who could be useful are never added.

But going back to the premise, groups like this are organized by executives who have only a passing fancy – they don’t monitor the group, don’t attend meetings, don’t provide clear guidance, and don’t keep the group focused and on track.   As in many things, reward comes from effort – and when the only “effort” is in suggesting a group should be convened to discuss an idea, the outcome is much discussion and no progress.

Value, Consistency, and the Value of Consistency

Brand is about consistency.   The value of a brand, from the very beginning, was that it indicated to customers what they could expect of a specific product from a specific vendor.   Later, when brand began to accrue other qualities, such as emotional benefits and the esteem of conspicuous consumption, customers were attracted to the brand because they expected those qualities to be delivered as well.

So the value of a traditional brand is that it delivers the same quality, experience after experience, year after year, decade after decade.   Brands that advertise they have been in business for a hundred years communicate a long history of consistent quality.  Consistency with expectations is critical.

Human beliefs are based on consistency.   When two things occur at the same time, we believe it to be coincidence and attach no special value to the correlation.  But when two things occur at the same time, over and over, we create an association and believe the two to be correlated.   It is not even necessary to understand the reason for the correlation: some of the most strongly held beliefs (superstition and religion) are based on situation where the correlation cannot be explained.

This is as true of brands as everyday experiences: a brand must be consistent to be meaningful.  There cannot be the sense that what the customer gets the next time will be different from what they got the last time.   Any change causes the customer to question the correlation, and to doubt that the brand has the qualities they expect - and for that doubt to become more generalized and existing beliefs to be questioned.  If the logo on the package is different, it is assumed that there must be other things that are different about the product it contains.

Whenever a brand changes, it takes some time to adjust: customers are displeased when anything is different, and need to be reassured that the qualities they value about the brand have remained the same.   Or when an unpopular brand changes to become more appealing, they must then convince customers who were disappointed in the past that things are now different and they should give the brand a second chance.

As an aside, correlations are subjective, so it is difficult to identify which qualities are important and which are not: companies assume they know why customers buy their brand and are indifferent to any other aspect, but are often quite surprised when a minor change that they assumed would be inconsequential results in an exodus of customers.   But the concept of a brand, or any object, is the sensory stimulation.   The customer cares not only about the taste of a food product, but it's scent and visual appearance as well - change any one thing, even an inessential quality, and customers cannot refrain from reconstructing their conception of the brand.

So in that sense, consistency itself is a value: knowing what to expect of a brand means that the customer doesn't have to reevaluate it each time they purchase.   This reduces the effort (cost) of buying, and ensures that the benefit-to-cost ratio remains favorable to the brand.   Any change casts doubt on their existing beliefs, causes them to have to re-think and re-evaluate, and provides an opportunity to change their conception of a brand, for better or for worse.

What Makes a Brand Vulnerable?

I read, with growing contempt, a passage about the reasons that customers abandon a brand to which they have been loyal for years in favor of an “upstart” brand.  It was an extremely superficial and narrow-minded swipe that largely seemed to exonerate the brand for the very behavior that caused customers to abandon it.

The rationale for “customer abandonment” was that customers had no loyalty, they were unwilling to pay a higher price, the were unwilling to undertake additional difficulty to obtain and service the product, they were unwilling to compromise on their needs and accept a product that was functionally inferior to what competitors were offering, or in some other way to sacrifice their own welfare to support a brand that failed to serve their needs.

For each point in the brief list of reasons, I couldn’t help wondering why a brand should expect customers to remain loyal to the brand’s interests while the brand pointedly ignores the customer’s interests. After all, the only reason a person purchases a product is because they have a need to fulfill – and the only reason they purchase a given brand is that it is better than all the other options.  When another firm offers a better proposal, customers take it – and I don’t believe that should be seen as a failing of a customer, but as a failing of the brand to serve the needs of the customer.

The foremost complaint, as might be expected, is cost: customers abandon a favored brand for a lower-cost alternative.   But that begs the question: why does their favored brand cost more?   Is it because the brand is exploitative and charges an unreasonable markup?  Is it because the brand is inefficient and must charge more to cover its higher costs?   Is it because the brand includes unwanted features and services?   All of this is possible – but when a competing brand is able to sustain a lower price and customers who try it do not return, it becomes not only possible, but probable, that their previously favored brand is doing something wrong.

Another leading complaint is customization: customers abandon a favored brand for one that better suits their individual needs. Again, it begs the question: why does their favored brand fail to suit their needs?   Is it because they believe customers will accept a less suitable product for a lower price?   Is it because they believe that customers don’t really want the features and qualities the competitor offers?   Is it because they are unwilling to change their own product or processes when the needs of the market have changed?   When customers abandon, these are all possible causes.

Five or six other qualities were listed (some of them were redundant, others seem entirely frivolous) – but in each case the question is essentially the same: the firm is not delivering a solution of acceptable quality for an acceptable price, and customers who begrudgingly accepted it for lack of a better alternative abandon when that better alternative appears in the market.

So while I didn’t take much from the article itself, I did come away with a reinforced belief that a firm exists to serve its customers, and in order to attract and retain customers, a firm must serve its customers better than its competitors.   Nothing else matters, and nothing else should matter.

To suggest that customers accept a compromise when a better alternative is available is not only unreasonable, but also quite irrational.   And to cling to the belief that the brand is doing everything right and that something is wrong with the customers who abandon it leads to a suicidal level of complacency.

Conspicuous Consumption for Introverts

Consider conspicuous consumerism: consumers have perceptions of a brand and perceptions of the kind of person who uses a brand – and so when they choose to use a brand, they choose to associate themselves to the qualities of that brand.    We assume that a person who consumes luxury brands is successful and wealthy.  We assume that a person who consumes economy brands is smart and thrifty.   And so, when we choose a luxury or economy brand, we are making a choice about how we wish to be perceived by others.

This correlates to an extraverted personality type, whose beliefs about themselves are based on the opinions of others.   But I also have the sense that it indirectly correlates to the introverted personality type, whose self-image is based on their internal perceptions, because we internalize the qualities of brand as well.   When it is advertised that “choosy mothers” select a given brand of peanut butter, mothers are meant to feel that if they choose a different brand, that they are bad mothers to their children.

Brand is a cultural and socioeconomic signifier.  The consumption of a given brand leads to a sense of belonging to a social group of people who use the same brand, or distinction from those people who use other brands.   It can be seen even among young children that there is a desire to use specific brands to “fit in” with a desirable group and distinguish oneself from the members of an undesirable group.

But again, while this seems primarily an extraverted mindset it also resonates with the introvert: it is not that they wish other members of those groups to see them in a certain way, but that they consider themselves to be members of some groups and not others, and make their choices based on a judgment that is internal rather than external.

In the present time consumers have many more choices and far less time than ever before.  Even those inclined to consider purchases carefully cannot do so for every purchase.   And since we know that advertising is biased and even critics have their own agendas, we increasingly turn to other consumers as a guide – not their words, which are unreliable, but their actions:  we are attentive to what they do, what they buy, what we use, as their best and most genuine endorsement.

We are constantly bombarded by commercial messaging and exposed to thousands of brands a day, we are inundated and are no longer fully aware of all the information thrust upon us.   That we are unconscious of the way in which we are influenced by external factors does not mean that we are not.

We often make decisions and honestly believe we have acted on our own judgment, not recognizing the degree to which we have been influenced by other sources.  And of course there is rationalization: we act on impulse, emotions, and blind faith - then rationalize an irrational choice after the fact to assure ourselves we are in control, still making choices as an individual.

To some degree, “what do others think of this brand?” and “what will others think of me if I purchase this brand?” influence our buying decisions.   The more likely it is that we will be observed or judged for a purchase, the more that the opinion of others (or our expectations of what their opinion might be) influence a purchasing decision.

But again, for the introvert, “what will I think of myself if I purchase this brand?” remains a valid question and a significant influence of buying behavior.   While such a person cares nothing for the opinions of others, he cares a great deal about his opinion of himself, and is therefore subject to the same influences.

Leadership, Power, and Service

It is a mistake to think of leadership as being the power of an individual to control others in order to serve his own agenda.   This is not leadership, merely manipulation, and it tends to be short-lived.    Leadership is a task, performed when necessary, in the context of a society.   It is persuading others to act for the common good, not the personal ambition of one person.

Every leader coordinates the efforts of a group of people.  Particularly when the task requires others to contribute their ideas and knowledge, not just perform simple tasks, the leader cannot give specific orders and monitor compliance, but must give direction and enable his followers to contribute in ways he does not prescribe.   An MBA who is not a computer programmer, yet must manage a team of programmers, cannot tell them exactly what to type.

The goals of a leader are very often not his own personal ambitions, but in service to others.  The CEO of a company holds a great deal of power, but that power is given to him by investors - and if he serves his personal interests rather than theirs, he will discover that the power he has can be taken away.  Those "leaders" who fail to serve their communities are not permitted to hold positions of authority for very long.

Leaders must also act in support of their followers.   Even their followers who have interests to be served, and when they are not served, they cease to follow.   Typically, a follower agrees to bear some hardship in exchange for a personal reward – the worker labors to earn his pay, or in some instances because he enjoys his role or the sense of accomplishment he gains from performing the work.   When the followers are asked to bear hardship and are denied any reward, they lose the inclination to follow and eventually abandon the leader.   His power to command is given to him by those who will obey his commands.

And this leads to the difficulty that leaders face: their power comes from multiple sources, all of whom must be served.   To serve the investors and ignore the welfare of the employees is to fail, and to serve the employees while ignoring the interest of the investors is also to fail.   The leader considers himself to be master, but has multiple masters that he must serve.

The difficulty for leaders is in balancing the hardship and reward for all parties involved in an undertaking.   In commercial organizations, the investors must part with their capital and expect a return, the employees contribute labor and expect financial rewards, the customers part with their money and expect a benefit, and so on.  A manager in the commercial organization must consider the reward that each party expects and the hardship each party will undertake to achieve it.   His own willingness and desire determine whether he remains interested in a leadership role – but that is only one of many competing interests.

There is no rulebook that will give the leader a clear path in all instances, nor any training that will enable him to act with certainty, nor any known means to determine how to fully assess the risks and the benefits.   He must think and decide. In general, the guidance to leaders is vague and identifies the priorities but offers little help:  it will tell him of the interests are to be served, but not how to mitigate among conflicting interests. Figuring that out is the talent of the leader, and the ability to do so is what qualifies him for that role.

So to remain effective at a leader means considering the interests of all – to set the appropriate expectations of the hardship they will endure, to demonstrate a willingness to provide the benefit for which they will endure the hardship, and to ensure that, when action is taken, the hardships are not greater nor the benefits less than he led them to believe.   Succeeding at doing so is the only way that a leader can retain power for an extended period of time.

It is also necessary for a leader to serve the interest of all.   An employee may be willing to undertake additional hardship without additional reward once in a while, but if his interests are never served he will soon lose faith in the leader and regard him as a swindler, manipulative and false.  In the same way, every individual affected by the leader must feel that, over time, the balance of benefit and hardship are acceptable.

In this context, it should be more clear that empathy is an important skill for mangers – it’s not about being “nice” or catering to the ego of others, but about considering the interests of others and ensuring they are served so that their willingness to follow can be maintained for the long term.   Leaders who lack empathy and do not consider the interests of others may be able to swindle them in the short term, but will not be able to sustain their willingness to cooperate – and as a result, will not be able to maintain their own power.