3 Questions You Must Answer to Stop Your Business Going The Way of the Stagecoach!
In this posting I look at 3 simple questions that you need to ask yourself to ensure your company and brand flourish and grow into the future. 3 questions that had the owners of Stagecoaches asked themselves they may have survived as robust and booming businesses. They seem simple and obvious questions, but how you answer them will determine if your business lasts the test of time.
Stagecoaches were once the only way to travel from place to place. The companies behind them did not survive. At one time, stagecoaches were the best, safest and fastest way to travel distances. There were vast stagecoach networks competing for their share of the traffic. Today the companies behind them are gone. They were destroyed by alternative forms of travel that emerged.
But could these companies have avoided being obliterated?
I believe they could have. This article explores 3 key questions that every company and brand needs to ask themselves. They need to ensure they answer them in ways that provide a clear, but liberating, path to continued and future growth and success.
Stagecoach companies made the mistake that so many other failed companies and brands made. They did not ensure they were reinventing and evolving guided by a deep understanding of what business they were in, who and what they were really competing with and by challenging themselves to understand what their real expertise was.
Every company and brand should ask themselves these 3 key questions. 3 key questions that if answered correctly can ensure survival and success:
- What are you really offering?
- Who are you really competing with?
- What is your real competency?
They sound obvious questions. They sound simple to answer. But if you do not think deeply about them before you define the answers, the subsequent implications for your business could be fatal. Not being challenging enough when answering these questions are the main reason that many brands shrivel and die.
They end up focusing on the wrong areas to innovate or improve. They focus on the wrong enemy and threat to compete with. As a result they miss what they could be doing to succeed and prosper over time – even if not what they do today.
Based on how you answer them, there is a risk that the “Stagecoach Mentality” could take hold, and ruin you.
By “stagecoach mentality” I mean a mentality where you define your business too narrowly. You miss what you could be offering, forgetting who you really compete with and what you should be doing about it.
Just like the stagecoach owners in the Wild West did. They ended up focused on offering the best stagecoach service, or the cheapest stagecoach service or the fastest stagecoach service. They were focused on improving their stagecoach business versus other stagecoach competitors. By defining their offer, and who they were competing with too narrowly, they were obliterated by a step change form of transporting people from “A” to “B” in the form of railroads.
Something that was repeated again in the transportation business when the jet plane destroyed most of the lucrative transatlantic liner companies in the late 1960s/ early 1970s. Jet Planes, and the new companies behind them, destroyed all of the liner companies except for Cunard. In the 1970s when jet travel destroyed all of the other transatlantic boat services, Cunard focused on re-inventing their offer by focusing on their competency and by actively competing with the new threat.
They launched into “The Best Way to Cross”/ “Crossing is Half the Fun” campaign and on defining what they should be offered in the form of luxury ships (like the Queen Elizabeth 2) and their unique White Star Line service. Today they have a growing fleet of premium ships and are seen as the icon for cruising.
You need to define what business you are really in, and who the competition really is.
It may not be the same form, structure and category that you operate in. For example, Coca-Cola do not see themselves as competing in the cola business, but for a share of drink consumption. Be that tea, coffee as well as other beverages. This drives a very different approach and behaviour across the organisation to if they just saw themselves as fighting for a share of the carbonated cola market.
Brand Caretakers versus Brand Builder Visionaries answer the 3 questions in different ways.
In a previous posting, entitled “Brands are Created by Visionaries, and Destroyed by Caretakers“, I discussed the difference between a “Brand Builder” (Visionary) and a “Brand Caretaker”. A Brand Builder is forward thinking. A Brand Caretaker focuses on optimising today.
A brand caretaker in charge of the stagecoach business would have been focusing on how to improve costs, better compete with lower prices or to improve margins, how to make the scheduling more efficient to improve service, or even how to improve comfort versus the other stagecoaches.
A Brand Builder Visionary, while probably also doing this, would have been challenging themselves on:
- What they were really offering: A fast, safe and reliable way to get from Place “A” to Place “B”?
- Who they were really competing with: Any form of transport that could get people from “A” to “B” existing or future?
- What their real competency was: Scheduling? Service?
If they had answered the questions in this way, they would have been more likely to have re-invented and evolved their business. Perhaps today they would still be the leading company and brand transporting people in a safe, efficient and fastest way possible today.
Let’s look at some other examples of companies and brands that got it wrong, and some that seem to be getting it right!
What are you really offering?
They probably defined what they were offering really well: instant pictures. But they did not focus well enough on WHO they were really competing with. So when Digital Cameras came along, instead of them being the leader and first at digital, they missed it. They had been the ones to first reinvent photo taking by offering “instant pictures”. They then let “instant photos” destroy them! They did not define that they were really about offering was “instant pictures”, not a specific way of delivering them. They got caught up in optimising what they had, rather than understanding what they were really offering.
Who are you really competing with?
Remember the explosion in these, when brands and variants seemed to be launched every day? Alcopops boomed, and then pretty much died. While cider brands took off instead. The reason is that Alcopops did not understand what they were really competing with and for, and what they were really offering.
Alcopops, and the drinks before them (like Babycham) and cider brands are all competing to be the “starter drink of choice” for young people. “Starter Drinks” are those they first try and drink when starting to consume alcohol. The mistake that Alcopops made was they all started focusing on out doing the other Alcopops. They did not stay focused on what the next generation of starter drinkers were looking for. Cider focused on that, and won the battle. Alcopops did not focus on who they were really competing with, which was all other drinks that could be the option as “starter drinks”.
What is your real competency?
This area is one of the most interesting, and the most misunderstood. As Marketers we focus so much on brands and the detail of execution, that we often forget to think about what is our real competency. I think this is a key reason why some companies flourish, and others die over the longer term. They do not play to, and exploit, their real competency, but stay focused on the physical category or service area they operate in.
Let’s look at some examples of competency and how it has shaped what companies do.
Johnson & Johnson had no adult skincare and beauty business in the early 1990s. They had the century old baby products line, but never had been successful at creating and building adult skincare brands despite many failed attempts. They changed their approach. Now they have one worth billions of dollars. Johnson & Johnson went from no adult skincare business to be the #1 skincare player in mass in the USA in a very short time, by focusing on their competency.
The history of the company in other segments had been in acquiring, adding technology and then extending brands through their global networks in 160+ countries. They focused not on creating beauty brands from scratch as they had been doing, but on acquiring small brands which had clear visions and a clear point of differentiation. They then made them big in their home market through adding their technology and science, and then globally expanded them across the world.
Whitbread used to be a brewing company focused on beer. Today they are a massive, and much bigger, company by transforming from a brewer into a company without any brewing at all. They are focused on “eat, sleep and drink” with brands like Premier Inn, Beefeater, Brewers Fayre, and Costa Coffee. They understood their competency was not “brewing” as such but in supply and customer service.
Tate & Lyle, the sugar company for generations, will soon no longer sell sugar – as there is no money to be made in it. They understood that their competency is in producing and selling staples and commodities, and so have been moving into more profitable and growing ones like starch.
It is very easy to get caught up in the short term and what you have today. You measure your share in the very specific segment you operate in, and over obsess about your immediate competition. Just as stagecoach owners no doubt did all those years ago. But you need to step back and ask yourself 3 key questions, and make sure you answer them in a way that will define and liberate your brand and business at the same time.
- What are you really offering?
- Who are you really competing with?
- What is your real competency?
What do you think?