Playing To Win

How Brands Grow & Playing to Win

Utility & Compatibility

In this post, I am continuing my series on popular strategy books/concepts and how they link (or not) to Playing to Win. I have previously covered Jobs to be Done, Blue Ocean Strategy, Business Model Generation, and Balanced Scorecard. This one, my 35th Year III Playing to Win/Practitioner Insights piece, is based on a reader (Chigz) request and is called How Brands Grow & Playing to Win: Utility & Compatibility. You can find the previous 145 PTW/PI here.

The Book

How Brands Grow (HBG) is a book by Byron Sharp, a New Zealand-born professor at University of South Australia and Director of the Ehrenberg-Bass Institute, a marketing research center that does a lot of useful work (unlike many business school research centers). Despite being published a long while ago in 2010, the book still ranks in the top 40K titles on Amazon.com — which is pretty darn impressive for an old and meaty business book.

I think of it as one of the handful of books written in the 21st century that I find most valuable to my thinking and work (along with The Mystery of Capital, (Growth) Mindset, Thinking Fast and Slow, The Good Jobs Strategy, and Grit (note to avoid getting into an argument, I am not saying they are the best, just the ones I find most valuable to my thinking/work).

Since I am on the record as saying marketing is indistinguishable from strategy, I happily include HBG in my above list of strategy books about which I am opining on their relation to PTW.

I was introduced to Sharp’s work in 2017 by Craig Wynett, then at P&G but now retired, when we worked to put out the facts to counterbalance the fantasies that raider Nelson Peltz was promoting about small brands beating large brands across P&G’s businesses. Ehrenberg-Bass Institute did the detailed analysis which showed convincingly that despite all the hype about small brands, big brands were growing at the expense of small brands across P&G’s categories.

During that effort, I became familiar with Sharp’s work, including HBG. Do I love it all? No, I never love everything in a book. But I liked most of it. Sharp gets criticized for overstating to make a point (I would never do that — oops I just did) but that doesn’t bother me. He slays faulty business models and that is something I spend a lot of time doing, so I feel a sense of kinship.

One thing that perplexes me is that is that Sharp is negative on differentiation. He doesn’t think much of differentiation and prefers distinctiveness instead. But his definition of distinctiveness is my definition of differentiation. So, we appear to agree on substance but not semantics.

In terms of compatibility with and utility to Playing to Win (PTW), I see two compatibilities plus one valuable utility. On the former, HBG shares a very similar mindset to PTW, and it provides some explicit clarifying frameworks for aspects that are implicit in PTW. On the latter, HBG contains one big insight for me that is now imbedded into my practice of PTW — and I am grateful for that.

Mindset Compatibility

I love what I think of as HBG’s focus on real people versus theoretical ones. I know behavioral economics has been at this for a while, skewering the notion of rational, utility maximizing economic actors, but HBG takes it another distance in the domain of marketing. Sharp thinks that marketers focus too much on theoretical customers, who marketers assume listen very carefully to ads, love complicated and elliptical stories, obsess about brands in their daily lives, and love to be taught new and interesting things by advertisers.

Instead, he thinks about real people who ignore ads as much as possible, love simple messages with high processing fluency, mainly don’t think about brands, and hate advertisers who try to teach them things. I love it! And it is entirely compatible with the PTW view, which focuses on what customers do, not what they say. This is why I am skeptical of pretty much all customer research. Customers will say whatever they believe the questioner hopes to hear and will do something completely unrelated.

I remember vividly getting to University of Toronto as a freshly minted Dean of its Rotman School of Management and getting sat down and told, as a rookie Dean, how to do fundraising: i.e., get a list of rich people and go ask them for money. The method assumed things about wealthy people that I didn’t believe were even close to true — and thanks to a long history of consulting at the senior levels of organizations, I had interacted closely with lots of rich people, both executives and owners. I completely ignored the instructions I was given, and we had better fundraising success than any other faculty at the University and any other business school in the country. The fundamental reason was that we focused on potential donors as real people, not theoretical ones.

Framework Compatibility

I love when someone can create a useful conceptual framework for something that I observe but can’t put a name to. HBG did that for me with mental and physical availability. I had experienced it — but didn’t generalize it, as HBG does.

Back in the mid-1980s, I had done a monumentally successful strategy study for a newspaper client. It was worth hundreds of millions (if not billions) in economic value to the client. A couple of years later, I happened to talk to the CEO, and he mentioned to me that he was in the middle of a strategy study with Boston Consulting Group (BCG). I was absolutely outraged! I had done a hugely successful strategy study for him, and I should have been his strategy provider for the next big study. I asked him how it came about, and he said that a BCG partner had visited him with an idea, and he thought it was meritorious so he hired BCG to carry it out. I was still outraged. He should have called me to do it!

But I had completely lost Sharp’s Category Entry Point (CEP) battle. The CEO’s mental availability of me was near zero — because I had made the mistake of not having spoken to him in a couple of years. And it was easier for him to simply hire BCG to do what they talked to him about — rather than explaining it to me (if that had even occurred to him) and asking me to propose in it. So, I felt the effects of the availability challenge even if I didn’t understand it.

And then I worked on the topic with AG Lafley at P&G. One of his signature initiatives early in his time as CEO beginning in 2000 was for P&G to focus on ‘winning at the first moment of truth,’ which became known as FMOT. P&G had always focused on the moment of truth as being the point in time that the consumer used the P&G product in question. Lafley wanted it to understand that it was, in fact, only the second moment of truth. Consumers wouldn’t be in a position of using the product if they hadn’t picked it off the shelf (whether physical or digital) in the first instance. Without naming it as such, Lafley was calling for improvement of the mental and physical availability at the precise point that the shopper was walking (physically or digitally) down the relevant aisle.

I have long advised clients not to advertise in random bursts but rather to either not advertise at all or advertise consistently — but most choose to advertise sporadically at best and then complain to me about advertising effectiveness — again, mental availability without knowing it by that name and concept.

Thanks to HBG, I have a better language for discussing the elements that are contained in the concepts of mental and physical availability. I now help clients understand that if they want to win, their How to Win, Must-Have Capabilities, and Enabling Management Systems have to ensure that they produce mental and physical availability — in fact win the mental and physical availability battle with their competitors. Otherwise, their How to Win is likely to be a fantasy.

The Big HBG Insight for PTW

The big and valuable HBG insight for PTW comes partially from Sharp with a big assist from the aforementioned Craig Wynett. Craig’s meta interpretation of Sharp’s take on customer behavior is that it should be conceived of as probabilistic, not deterministic. A deterministic view would be that if a customer is determined to reside in a given segment, the customer will demonstrate that segment’s behavior consistently.

I would argue that was my implicit view of segmentation prior to this insight. My Where to Play (WTP) would choose a given segment (or segments), target it (them) relentlessly and precisely, and ignore the inhabitants of non-targeted segments. In fact, I didn’t mind making choices and taking stances that curried favor with the targeted segment and, at the same time, alienated those outside the targeted segment — and made no bones about that alienation.

But after Sharp/Wynett, I don’t do that anymore. Lots of potential customers outside any target you establish might buy from you if their preferred choice isn’t mentally or physically available at the critical point of purchase. You win by default — and there is nothing wrong with that because your competitors will win your best and most targeted customers if the circumstances are against you. Thus, don’t give customers outside your core target any excuse to not find you acceptable if circumstances give you a chance. It is fine if they are a light user, or even a rare user. The best combination for any company is lots of purchases from the customers it targets plus supplementary purchasing from those it doesn’t. And that is because customer behavior is probabilistic not deterministic.

Practitioner Insights

If you haven’t read it already, How Brands Grow is well worth the read. Not many business books are. Really, not many at all and many are dreadful. Everyone will take different things from a book like this because it is full of good ideas, only a subset of which I cover in this piece.

I hope you take from it that you should be marketing to real people, not theoretical ones, and if you treat them as less real than you are, then your efforts will not be rewarded, and you will be frustrated. But the frustration would be your fault, not theirs. A great test is whether you (or your mother or father or sibling) would be favorably influenced by your efforts. If not, probably others won’t either.

Never forget to think about how to build and maintain physical and mental availability of your offering. Otherwise, the rest of your Playing to Win work will go to waste.

And think probabilistically about your customers. I know it would be very handy if competitive life was deterministic. But in business, you are selling to real people whose actions are more probabilistic that deterministic. The newspaper CEO absolutely loved my work and knew my work made his company a fortune and helped his successful run as CEO. But that didn’t mean, deterministically, that he would hire me for his next strategy study. There was a probability that he would — but the probability was influenced dramatically by what I did and didn’t do to maintain mental availability.

I had a good Where to Play/How to Win combination — strategy advice to CEOs of large companies delivered in a collaborative fashion that provided the best of insider knowledge and outsider counterpoint. But I didn’t think about how to maintain availability in my How to Win — and I lost.

But that is much less likely to happen now, and I can thank the insights of Byron Sharp (with an assist from Craig Wynett) for that — and so can you for your PTW strategy!