The recent Delhi elections placed a small party with minimal funds against a national juggernaut. And the small party came out an outright winner, whereas the large national party, despite all the might at its disposal, came out a cropper.
This David versus Goliath story brought to mind some rich learnings for company honchos, big or small.
1. Do not take your market position for granted
I remember the words of the chairman of the number one motorcycle brand in India. His message to his leadership team many years ago was to not take their numero-uno position for granted but to build a relationship with the consumer as a foundation for maintaining an enduring affinity and preference for the brand. It is no surprise that they are still the leading motorcycle brand in India.
2. Leadership can lead to arrogance. Arrogance leads to complacency
Consumers do not like arrogant leaders. Simple! It’s the difference between ‘I will make what is convenient to me’ versus ‘I will understand what the consumers want and build my product and service accordingly’. Our leading national airline suffers from this myopic, conservative and old world view. No wonder they are the last choice for most flyers. The difference is ‘relevance’ versus ‘status’.
3. Customer engagement (and relevance) is the order of the day
Companies (and CXOs) cannot afford to build an enduring leadership position without engaging with their consumers. Consumer preferences keep changing due to a combination of multiple choices, word of mouth, experiences and media exposure. If you are not investing in constantly checking and monitoring the pulse of the consumer, your brand will no longer resonate with your target and will soon be rejected for another brand. Barriers to exit, in most industries, are low today. Remember, the consumer is not a statistical artefact but a person with a mind of his or her own and with multiple choices. They will not hesitate to exercise their options if you cannot provide what they want. We are increasingly witnessing this phenomenon in the telecom industry in India
4. Your sales channel is your front end with customers; do not ignore them
In India, more than anywhere else in the world, the distribution network is critical in building brand preference. You need to motivate your partners here, appreciate them and reward them in order to build a sense of belonging and cultivate a sense of pride. They too have options to move to competition, and no amount of monetary incentives will work if there is a sense of alienation. Conversely, we also learn a lesson from this election of how important it is to recognise our loyal retailers who have been with the brand for a long time. A new retailer is only as good as the first year sale…until it proves its loyalty through’ consistent performance.
5. Mistakes happen; don’t give up!
In politics, as in corporate life, when one embarks on a bold path, mistakes are inevitable. But we need to be resilient enough to learn and correct mistakes as we move to a new season. Leaders who become invisible in times of trouble will demotivate the troops even further and will ring a death knell for the company. Failure is the biggest teacher if one has the courage of conviction to see it as a temporary obstacle on the journey ahead, to put it aside and move on with greater vigour.
Many companies today, prefer to hire professionals who have taken the bold step of being entrepreneurial or trying out something of their own, as they feel these people have a better sense and appreciation of ground realities.
6. Be transparent in thought, vision and action
Let's face it, the financial statements of some firms are designed to hide rather than reveal information. Investors should steer clear of companies that lack transparency in their business operations, financial statements or strategies. Companies with inscrutable financials and complex business structures are riskier and less valuable investments. Transparency is another word for ‘assurance’. Remember, consumers will forget one year of bad performance, but will remember for long if the company has hidden something from public view. Even in manufacturing, there is no shame in recalling a car batch where a problem has been detected. Consumers may be unhappy temporarily but will appreciate the honesty and candidness of the company in accepting their fault rather than hiding it from public view.
7. The youth is the future; ignore them at your peril
People often say that today’s youth are not brand-loyal, that they are frivolous in their choices, that they get influenced by peer pressure. So what? Today’s young brigade is socially aware and is also aware of the power they exercise in influencing decisions on brands in the household. But their outlook is different, their exposure is different and their expectations are different. They will be loyal to a brand only if the brand resonates with them and their aspirations—not just because their parents were/are loyal to it. Affinity with the youth also provides an exuberance and freshness to a brand and helps to extend the lifecycle. But, their attention span is low and if you do not deliver on your promise, they will have no qualms in ending the relationship and dumping you for another one that catches their fancy!
8. Building expectations is one thing. Executing them on ground is the key
And that brings me to my last, but most important, learning. A corporate vision document will only remain one in paper if the leadership does not act on it. The proof of the pudding is in the eating! Promises have to be grounded in reality. The consumer will appreciate if you can execute and deliver on the brand promise, but will be most unforgiving and brutal if the brand or service falls below expectations!
Rajat Sethi is a founding partner with Strategic Caravan International, a customer relationship and valuation advisory firm.