Couch analytics #112. Who is to blame for the failures of companies and what to do about it

The other day I was asked a question that only at first glance seems simple - why are some manufacturers successful and others not? After all, there is no secret in what tools and how to apply in order to achieve sales growth. But someone knows how to do it, and someone from time to time does not do it very well. And here there are two eternal questions - who is to blame and what to do. It is impossible to answer these questions even within the framework of one article, the topic is too broad and deep, something will always remain out of our attention. Excessive immersion in details can confuse us and highlight things that are not so important, are not the root cause. An attempt to explain what is happening with the help of simplifications, I also do not like it, because it does not give a clear picture of the world and is replete with lacunae. Thinking over the answer to this question, I twisted possible explanations, applied them to the real market situation, and considered that even through simplification it is possible to explain what is happening with companies and why some are successful, and someone doing exactly the same is not. Take a look at the picture below, it was painted in 1962 and I am sure that you have already born an association with both the style and the artist.

Salvador Dali, right? The opinion is quite reasonable, since the work resembles his paintings, but this is an artist of the same school and the same region - Angel Planels-y-Croagnas, the painting is called “The Longing Sailor”. Here is an example of another work that was written in 1936.

That's definitely Dali, isn't it? And again by, this is "The Appearance of Vermeer of Delft in the Gulf of Roses" by Joan Massanet y Julie. These two paintings are united by the fact that they are uniquely attributed to the layman, their authorship is attributed to Salvador Dali, since it is his style that is associated with such works. Dali's genius lies not at all in the field of artistic skills, but in the understanding that the artist's modesty does not decorate and talent must be backed up by eccentric antics, which in turn will draw attention to his work. Dali's whole life is a series of shocking antics, the main task of which is to maintain interest in his person, and in Accessories for Mobile Phones & Tablets in the Central Business District, he quickly became a master. Dozens of artists of his time, who were destined for fame, have sunk into oblivion, only art historians remember them, they did not leave a noticeable mark in the history of art. The parallels between the art market and sales of electronics or something else are unambiguous, since only the product changes, but the essence remains exactly the same, approaches in any of the markets are universal, the language and specifics of the product change, but not the algorithm for its sale.

Let's rewind the time and remember the end of the 90s, when the name Nokia was associated with mobile phones and denoted the most progressive devices that existed then. Every year, sales grew by leaps and bounds, and the same Motorola that invented the telephone consistently gave way to this market. Motorola changed management, adopted Nokia's practices, studied other people's experience, and eventually continued to lose the market anyway.

In the late 90s, I had a chance to attend an internal discussion at Motorola, where for several hours they listed marketing activities, work with operators and retail, compared with the same Nokia. Such a comparison ran like a thread through that discussion, various parameters were evaluated, engineers proved the technical superiority of Motorola's models, which was real, not imaginary. The company had a great product from an engineering point of view, money for promotion, brand awareness and a positive perception in most of the countries of the world, but Nokia consistently conquered the market.

Each time has its heroes, each time brings its own fashion. As it turned out, Motorola made a number of serious miscalculations, for example, the company was the last to introduce games into their phones, considering it frivolous. I remember very well how people from Motorola, and occupying very different positions in the company, proved to me that for their audience of businessmen, toys on the small screen are something unimaginable. They are not needed! Businessmen have good computers at home and at work, they can play games on them, and nobody needs this primitive snake type. Time has put everything in its place, and the mobile gaming industry has already become a key industry, expanding the gaming market and addressing it to several billion people. The telephone has become the main gaming device of mankind.

So we found the first important explanation, companies often stop in their evolution, their products become obsolete and “newcomers” offer the market something more interesting. The main thing that is important for any buyer is the new emotions that he wants to get from the product. Positive emotions seasoned with a small portion of surprise from meeting with something useful and new, which was not there before.

Of course, the size of the company and the popularity of the brand play a role, if in 2007 an analogue of the iPhone from some unknown manufacturer appeared and it would have passed unnoticed, it is a completely different matter when the new concept of the phone (then the iPhone was a touch phone, it was called a smartphone later year) showed Apple. Companies that are already known to the consumer find it easier to demonstrate new products, they already have a certain loyal audience, they do not have to grow from scratch. As well as when a crisis and stagnation in ideas come on, they do not fall instantly like a Colossus on feet of clay, but usually slowly slide into oblivion. The example of the same Motorola, whose agony has been going on for a decade, proves that the inertia gained once does not allow the company to disappear overnight. The perception of the brand is too strong to refuse it, and the current owners continue to torment the corpse of the once great company.

Motorola's example is also interesting in that it demonstrates the role of the individual in history. In 2001, Jeffrey Frost comes to Motorola, before that he worked at Nike. In less than five years, he transformed the company from an outsider to a growing monster, just remember the marketing campaign for the Moto RAZR and the success of this thin clamshell. History does not know the subjunctive mood, but if in 2005 immediately after his appointment as vice president of Motorola, Jeffrey had not had a heart attack, we would have seen a completely different market and the balance of power in it. I highly recommend reading the history of RAZR to understand how an industry flagship emerged from a random and small PR project, which all manufacturers, without exception, were guided by.

I believe in people and that it is people who create products and are the essence of companies. You can treat Steve Jobs as you like, but it was his charisma that became the key to the success of the iPod, and then the iPhone. Someone praised him, someone hated him, but he left few people indifferent. The approach of Steve Jobs was that he created products for himself, and not for some mythical buyers. He thought about the convenience and beauty of the product for himself, he did not care about the opinions of other people. This approach has the right to life if there is a strong personality behind it, able to convey their worldview to the crowd.

For example, at Microsoft, many people, having neither the charisma of Jobs nor his knowledge in the field of crowd psychology, mechanically repeated many of Apple's actions. The failure of Windows Phone was largely predetermined by mindless copying of other people's actions, when people at Microsoft did not hear the market and simply repeated a lot after Apple, believing that such a semblance of a cargo cult was enough to succeed in the market. The failure of this story is known to us, Microsoft was unable to succeed and actually buried the entire mobile area, spending tens of billions of dollars on it.

And here we come to the most important driving force of any company, the people behind the products, those who create, advertise, serve them. You can be a brilliant engineer, but not be able to realize your genius, because it is not in demand in the company where you work. And there are a huge number of such examples when companies cannot use the talents of their employees, and people cannot prove that they are capable of more. The corporate culture of many multinational players is built with multiple foolproofing so that the actions of individual employees cannot negatively affect the large structure. It is extremely rare that large corporations are able to invent something unusual and striking, look at the same car market, Tesla is of great interest, which is directly related to the personality of Elon Musk, and not at all to the company's success, which is not yet. Old automakers do not arouse such interest, although their experience, capabilities and resources are disproportionately greater than those of Tesla.

I love the example of Google's structure, where small research teams can create something new. It is also a response to the rigidity of many corporate structures, an attempt to avoid this trap. It is people who create companies, fill them with life and shape the future.

Once upon a time I heard a phrase - geniuses do not work for idiots. These words accurately convey how teams are formed in companies, the internal environment. In words, many people are very strong professionally, in fact, their companies do not achieve any significant success, except for spending billions of dollars in nowhere. Cadres decide everything, this phrase has not lost its relevance today. It is very important to understand that each person can attribute their failures to external factors (the boss is a fool, the company has no money, and so on), but in fact the failure of the company is the failure of each individual employee. Common truths, but today they are ignored by many, as they are not considered worthy of attention.

Therefore, the global success or failure of companies is a reflection of the processes that take place inside and outside are often not visible to us. This is what is called corporate culture, we are faced with consequences, we indirectly see the result of the work of nameless people.

I will give an example of the influence of the human factor on the company's sales and its perception in the eyes of customers. I'm sure that you have some kind of jacket with a zipper, pay attention to how the tongue of this zipper looks - it can be smooth and glossy or matte. Fashion brands usually use relatively expensive glossy tongues, they are more difficult to manufacture and require special care. Such a tongue is wrapped in a protective film at the factory so that it does not get scratched during transportation. After installing the zipper in the garment, a special worker checks how it works, and then re-wraps the tongue and all glossy surfaces in a protective film, for example, these can be buttons, rivets, a brand name plate. The buyer should see a thing with beautiful, shining elements. In any case, in theory this should be the case.

In practice, everything depends on the human factor and often things get into the store with films already torn off, which instantly makes glossy surfaces smudged or even scratched. In fashion boutiques, after each client, they try to wipe such surfaces so that the thing shines. Where they don't, sales tend to be lower. Beginners in the clothing industry often choose expensive accessories, believing that they will ennoble their models, give them an extra gloss. None of them think about how to change the culture of production, logistics and other parameters for working with such fittings, they face this in practice.

The first question that arises at the factory is whether it is necessary to wrap the glossy tabs in a protective film, this is an additional operation that is usually done by a worker, the machines cannot always handle this correctly. The price of such an operation is non-zero and the first thing many people want to do is save money. As a result, the accessories arrive in boxes where the tongues rub against each other and lose that very gloss long before the product is sewn. The original idea to ennoble clothes with the help of such a technique becomes untenable.

Let's say the person responsible for ordering accessories has come to understand how to do it right, he orders a little more expensive, but with a protective film. The next stage is how the very lightning is inserted, whether or not the protective layer is removed. Do you think it should be removed? It was a revelation to me that this must be done in order to check the correct installation of the lightning, to avoid any slightest problems. Then you need to wipe the tongue and install the protective film again (already new, old at this point in the trash). In production, this is an extra operation that increases the cost of the product.

There are such “little things” in the not very intelligent production of clothes, a cart and a small cart, in the production of electronics there are many more of them. It is not enough to buy the best components, it is necessary that people in your company know how to work with them and the work algorithm itself assumes the correct use of such components, which is far from always observed.

What I'm talking about is the work of people, which may not be visible, but it always shows up in the final product. And if a company suffers losses for a long time, and the management in it is unchanged, then be sure that the problems will continue. This is a question of the team and people who do not know how to change the rules of the game, turn the tide. Although sometimes the inertia of the structure is such that they may want to change something, but they simply cannot overcome objective factors and the unwillingness of the team to work according to the new rules.

Great companies start small, with the work of each individual employee and how he does this work. Most of the corporations that have been on the market for many years create conditions in which a person turns into a cog in a big machine. A cog that may or may not do a job well, but almost always without much initiative. And this is a problem, because at the moment when the brains stop thinking, we get a biorobot, not a person. My experience is that people with an active lifestyle are successful in any place, as they turn on the head. These people like a magnet attract their own kind and the companies where they work only benefit from this, as their performance improves. But this is rather a happy exception, since most just sit out their pants at work, from call to call.

When answering the question why some companies are successful and others are not, you can go into details, for example, to argue that they created a cool product, grabbed a piece of the market, and so on. But in the end, products are created by people and they are responsible for them, which means that everything depends on people and only on their skills. By and large, every company is successful if it allows people to develop their best qualities and skills, which means that the company itself can evolve along with the market.

And a very important point - the adequacy of a person is manifested in how he chooses the place in which he will work. Geniuses don't work for idiots. The next time you want to scold your company, think about this phrase and try to project the situation onto yourself. And my advice to you - be active, keep curiosity in yourself and let you need more than others. Then everything will turn out right in your life.