The Strategist’s Greatest Weapon

When it comes to strategy, most marketers seem to feel that left-brain, analytical thinking is far more important than intuition or imagination. In fact, most marketers are striving to be taken more seriously in a business world where numbers rule, and many are forsaking creativity in an effort to become more scientific in their approach – particularly when it comes to strategy.

However, this increased emphasis on pseudo-scientific testing methodologies has reduced our ability to accomplish our primary objective: organic top-line revenue growth. In fact, our ability to create differentiated brands that rise above generic, commoditised category benefits has come under serious scrutiny of late. There is reason to believe that an exaggerated emphasis on ‘science’ has reduced the creative energy invested in brand strategy development and led to less differentiated strategies.

It seems odd that far more time, effort and money are put into testing ideas than into developing good ideas in the first place.

Just as a building starts with an architect’s blueprint, a brand starts with a strategic premise. This is the core idea that directs and inspires everyone who works to bring the brand to life in the physical world. If this core strategy is unoriginal, flat and expected, it will drag down all that follows. More importantly, without a unique strategy at its core, the brand will not be fundamentally differentiated from its competitors. A number of studies over the past few years seem to indicate that we are failing to create distinctive, differentiated brand strategies. Ernst & Young reported that upwards of 80% of new brands fail and the number one reason cited for failure was a lack of differentiation. A Market Facts/Copernicus study in 2000 showed that in 40 of 46 categories studied, consumers felt brands were becoming less differentiated.

It appears that the attempt to create a pseudo-scientific strategic development process is actually leading to growing impotence in the work of marketers. But there is a tremendous opportunity to improve our track record if we integrate creativity into the strategic development process and build the actual brand strategy around a big, original idea.

It won’t be easy. The strategic development process has been ceded, even by many ad agencies, to science and testing. The language of marketing reflects this shift – we come to strategic conclusions rather than daring to have strategic ideas. It is thought to be largely irresponsible in most marketing departments or ad agencies to simply ‘have an idea’ about the positioning of a brand. Instead, we come to conclusions only after stretching budgets as far as possible to conduct quantitative, statistically reliable testing of alternatives. It seems odd that far more time, effort and money are put into testing ideas than into developing good ideas in the first place.

Science vs creativity

While we marketers are constantly looking for ‘a better way’, we seldom challenge the ubiquitous, if implicit, notion that creativity has little place in strategy. While almost everyone agrees that creativity should be applied in the execution of advertising, design or product development, too few feel that it should be the driving force in the development of brand strategy. The common belief is that a brand’s positioning or strategy is terribly important, so it must be created and nurtured through a ‘scientific’ approach where cold logic prevails at all costs. After all, this is the scientific age.

Most of the really important advances in our lives have come from the triumph of science and technology, so there is a strong bias in our culture towards being scientific in our approaches. I grew up hearing that science put a man on the moon; science created the computer; science stamped out terrible diseases. Advertisers have found that simply putting an actor in a white lab coat (the uniform of science) will make their sales pitch more convincing. The mantra of our times is that ‘if something is important, it deserves to be treated in a scientific manner’.

In the realm of strategy, an argument is sometimes put forward that creativity is less important because there are only a limited and finite number of strategic options anyway. The thinking goes that big, successful brands need universal themes as positioning ideas – and positionings with universal appeal are necessarily limited in number. At Tait Subler, we feel this is simply an excuse for undifferentiated, unoriginal strategy.

Creativity is really the process of re-combining known concepts into new, fresh ones. The number of ways that tired old strategies can be blended and combined into focused new ideas is almost infinite. For instance, Target Stores in North America successfully combined ‘cheap’ and ‘chic’, where previously those two concepts were kept separate in retailing. The result is a booming, fresh brand that is even taking a bite out of mighty Wal-Mart. Add an original personality or brand character to an original strategy and you start to see even more opportunity for creative thinking and differentiation.

But ‘me-too’ strategies are everywhere. The situation in the battery market is emblematic of the lack of original strategic thinking that is hurting so many brands. According to Fortune, the CEO of Rayovac called Wal-Mart’s launch of an in-house line of batteries ‘much ado about nothing’ in 1999, predicting that the store-brand’s share would stay below 3%. Three years later, when sales were at 8%, he allowed, ‘which I think is where they’re going to be’. A few months later he said ‘8% to 10% tops’. The core idea at the centre of Rayovac is ‘long lasting power for less’. How is that differentiating from Wal-Mart’s ‘Ever Active’ batteries? Today, store brands like Wal-Mart’s hold a whopping 27% share in the battery category. Until more original brand strategies are developed, this story is likely to be repeated in category after category.

Measurement vs insight

Today’s marketing science has diverted most marketers’ attention to the issue of measurement – measuring the value of strategies, ads, and so on. A marketer can pay a research company to provide a quantitative measurement of virtually anything. Business schools teach in MBAs that ‘if it can’t be measured, it can’t be managed’.

So we ask lots of questions about strategies: Is this a ‘good’ idea or a ‘bad’ idea? How will this idea ultimately perform in the market versus another one? What’s the ROI? No one is asking why the proliferation of such measurement techniques has failed to reduce the number of undifferentiated offerings and market flops. Great research is invaluable to developing great strategy. But great research provides fresh, original insights, not just a score.

The marketing discipline grew out of classical economics, originally hoping to explain consumer behaviour and distribution better than the ‘dismal science’ allowed. But like economics, marketing is now striving to be scientific in appearance. Mathematical models and algorithms are the surest sign of a truly ‘sophisticated’ marketer. Yet the larger companies that can afford these sophisticated tests seem unable to develop breakthrough ideas or strategies.

For instance, Coca-Cola in North America has struggled to develop new brands or line extensions in the last several years (from Surge to C2). Recently, it called in a number of agencies to determine once more what can be done to better position the core Coke brand. This isn’t a problem unique to Coke: organic growth seems limited in many companies with famous marketing clout and scientifically derived brand strategies. In recent times, most large companies have grown through acquisition of brands developed by smaller, less ‘sophisticated’ companies where strategic creativity and insight hasn’t been displaced by measurement.

Creative intuition is vital to synthesising strategy

It is quite ironic that marketing is rushing to embrace a more scientific approach just as it is coming under serious scrutiny in areas like economics and state-sponsored intelligence gathering. The American CIA has been on the ropes recently because of serious failures in Iraq and elsewhere. The New York Times reported that the presidential panel on intelligence investigating the Iraq intelligence debacle pointed to the same failings other formal reports have identified. It said intelligence analysts ‘displayed a lack of imagination’. Sound familiar?

The New York Times article went on to say that Sherman Kent, the father of the ‘scientific era in intelligence gathering’ was trying to replace what he saw as fuzzy old intuitive generalists with something ‘modern and rigorous… much like the method of the physical sciences’. However, since this modern era has arrived, the intelligence community has immobilised its ‘imaginative’ side and has become less accurate in its insights and predictions.

In June 2003, the New York Times reported on a strange meeting of the Federal Reserve Bank in Boston. The classical economists had invited a new school of thinkers dubbed ‘behavioural economists’, to help them understand what was going wrong with all their models. As Cathy E Minehan, president of the Boston Federal Reserve Bank, said in her speech, ‘All our models and forecasts say we’ll see a better second half but we said that last year. Now don’t get me wrong: mathematical models are wonderful tools. But are there ways this process can be done better? Can we inform the policymaker from 50,000 feet with wisdom gained on the ground, in the human brain, or in the way humans make decisions and organise themselves? I hope so.’

The behaviourists are no lightweights. Psychologist Daniel Kahneman, a forefather of behavioural economics, won the Nobel Prize for economics in 2002. The University of Chicago’s Richard Thaler is expected to win one soon. The New York Times reported that there is a common sentiment held among behaviourists that economics has been ruined by maths. George Lowenstein, a professor at Carnegie-Mellon University said, ‘Neo-classical economists came along in the mid-19th century and wanted to mathematise the new science of economics. They couldn’t include the “passions”, or emotions, in their models, because they were too unruly, too complex. But they also thought that the emotions were unknowable.’

As the New York Times reported, the behaviourists have been using current technology to help them dig deeper into emotions. For example, they study how people make financial choices while they are sad, hungry or sexually aroused; or they look at brain imaging to see what part of the brain is used when bargaining. Their studies have challenged common economic beliefs. For instance, it is usually thought that giving people more choice is likely to increase the likelihood of a sale – they are more likely to find something they want to buy if there are more choices. However, the same article reported on one simple experiment that refutes this idea. The experiment compares a display with six different types of jam to a display with 24 types of jam. The experimenters measured both the number of people who stopped to try a sample and the number who eventually bought. The results showed that more people stop to try samples of the jam when there are 24 jams, but only 3% purchase. The six-jam display had ten times the success in sales, with 30% of shoppers purchasing.

Real change will probably take time in economics and in marketing. In his 1962 book, The Structure of Scientific Revolutions, Thomas Kuhn wrote in some detail about the way that science deals with new information and new theories that are outside the mainstream. He described ‘big science’ and ‘normal science’. Normal science is about applying accepted wisdom: it ‘is predicated on the assumption that the scientific community knows what the world is like’, and scientists often go to great lengths to defend their assumptions. To this end, ‘normal science often suppresses fundamental novelties because they are necessarily subversive of its basic commitments’. It seems clear that normal science is at work in the case of marketing today, as practices that can be seen not to work continue without too much hesitation over their shortcomings.

Big science, on the other hand, challenges conventional thinking with anomalies. The forces that might normally do the job of big science might include stock analysts who would comment on the failures of marketers to drive top-line analysts are likely to be big believers in the approaches of marketing science, because they too are numbers-orientated and from the same business schools as the marketers. An outsider perspective seems required.

Reasoned arguments from iconoclasts are necessary

The politics and risks within companies seem to make it safer for most of us to use techniques and models that don’t work rather than ‘risk’ bringing more creativity into strategic development. When my partner and I originally started Fallon Brand Consulting, we wanted to make the status quo a bit less comfortable, to make more marketers and CEOs admit that it’s time to re-evaluate marketing in much the same way classical economists are now doing. That aspect of our mission continues as we evolve into our next phase as Tait Subler. Our focus is on integrating creative thinking into a thoughtful, analytical approach.

When we use our imaginations we intuit powerful motivators and create fundamental differentiation for brands.

Marketing and brand-building is based on understanding of the human mind, complete with its emotions and logical inconsistencies. When we use our imaginations we intuit powerful motivators and create fundamental differentiation for brands. Sir Isaac Newton lamented, ‘I can calculate the motion of the heavenly bodies but not the madness of people.’

As if in recognition of that very issue, Frederick S Breimyer, chief economist of the State Street Corporation, said at the Boston conference of economists, ‘We’re looking outside the box because the box we’ve been looking inside is empty.’