Our primary focus is simplicity. Clarity if you will. The reason for this singleminded approach (not to be confused with ‘narrow’), is that we believe there are many ways of solving the right problem; there are no ways of solving the wrong problem.

Strategy is not a mystical science, not an art. It is the basis for persuasion. You will find no leaps of logic in our work, nor data that has no value. 

Our range of freelance services include:

  • Communication Strategies
  • Business Plans
  • Interim Strategic Management
  • Qualitative Consumer Research
  • Brand Optimisation
  • Repairing esoteric research that has no path to profitability. Brands are not objectives in their own right – they are just a means to shareholder wealth.

 Need an entertaining and insightful KEYNOTE ADDRESS?   Read Sid Peimer's profile here

For a quotation, call today 0n 082 659 9167 or email sid@stratplanning.com

Some of the clients who have either received consulting services and/or attended training since 1994 include:




AAA School of Advertising






Africa Red




Atmosphere Communications


Bakgone Consultancy


Beachhead Media

Berry Bush BBDO

Black Sash

Blast Brand Catalysts




Bravo Design

Cape Peninsula University of Technology

Caxton Magazines

Cell C



Creative Counsel

Creative Performance

Creative Zoo

DDB South Africa

Delirium Advertising

Department of Public Enterprise




Elevation Medical




Faction Media


Fine Healthcare



Four Pin Plug

Fuse Net Solutions

Hardy Boys





Hot Salsa Media

Idea Engineers

Imperial Bank Medical Finance

Indigo Marketing

Inroads Advertising

Inzalo Communications


Joe Public

Johannesburg University


King James


Left Right Advertising

Legal Resource Centre

Leo Burnett

Lesoba Difference


Luci Ferin

McEwan Advertising

Media Assault

Media Shop



Metropolitan Republic

Missing Link

MMS Communications

Mortimer Harvey

Mr. Delivery

MSC Business College


Naledi Media


Nelson Mandela Metropolitan University


Nine Yards Communications

Ninety9 cents

Nkuzi Development Association

Nanosan Technology

Now Media

O’Brian Communications


Ogilvy Healthworld

Old Mutual


PHAT Brand Activation


PR Worx

Promise Group



Radioheads and United Stations

Red Cross Children’s Hospital Trust


Robot Dwarf

SA Institute for Advancement

SA Institute for Security Studies

Saatchi & Saatchi

Sabinet Online



Search Online Consulting

Singh & Sons

Society Communications

Spur Restaurants

Standard Bank


Strika Communications


Studies in Poverty and Inequality Institute


The Media Connection

The Mediashop


The Jupiter Drawing Room

TLC Marketing Worldwide

Traffic Integrated

Troika Imagineering


Twyne Advertising & Design



University of Johannesburg

University of Pretoria

University of the Western Cape

University of the Witwatersrand

Visuals & Interactives

Volcano Advertising

Western Cape Department of Economic Development and Tourism



I am currently the Executive Director of the Cape Chamber of Commerce and Industry based in Cape Town.

My values :

  • Curiosity – the desire to find out 'why'.
  • Clarity – a clear understanding of the problem.
  • Creativity – to provide a lucid, profitable and unique solution.

You can read my profile on LinkedIn here

NOTE: All fields marked with * are mandatory.

  • This field is for validation purposes and should be left unchanged.

Essential Strategic Planning Insights for Brand Custodians

This one-day course is currently offered in-house only.

Is it possible for your entire team to get to grips with strategy in just one day? The short answer is yes. 

Everyone agrees that strategy is important, but very few agree on what strategy actually is. With 'Strategy in a Day' your team will get to the very foundations of strategy, ‘getting it’ from the ground up.
Be stimulated and amazed as Sid Peimer takes you through the twists and turns of strategic planning to emerge with a fresh vista on planning to give you deeper insight and a broader perspective on strategy.

Strategy in a Day means your team will:

  • Have deeper insight into strategic issues.
  • Have a solid foundation on which to build and judge strategies.
  • Be empowered to convey your strategies clearly, confidently and concisely.
  • Be exhilarated at the end of a process that will have changed your outlook on strategy forever.


  • Brand Custodians who want to develop a wider pallet for their brand’s strategic options.
  • Account Executives/Managers/Directors who need to manage and build a brand.
  • Creatives who want to produce more impactful work that is still ‘on strategy’.
  • Strategic Planners with less than five years’ experience in the planning function (or seasoned planners who’d like a fresh perspective).
  • Business Owners or Business Unit Directors.
  • Other Professionals who wish to evaluate a career in Strategic Planning.
  • Those qualified in the ‘hard sciences’ such as engineering, who need to be able to formulate what is essentially an outcome that is ‘open’ as opposed to formulaic answers that science demands.
  • Entrepreneurs and anyone for whom strategic planning is a critical success factor.


The course is divided into modules incorporating all the skills required to master the four-step regimen required for effective strategic planning: extract-analyse-construct-communicate. These modules do not run sequentially, but are built on throughout the day.
Please note this course does not conflict with any existing planning methodologies or proprietary tools you may currently be using.

Content includes: *

  • Loaded with case studies: LEGO – from near bankruptcy to stardom, iPod vs Walkman, the Microsoft Zune, Lion lager (don’t mention the beer), Zima, the Belgium Coke incident and more… 
  • The historical origins of strategy 
  • Strategic planning schools of thought 
  • The evolution of modern business strategy: Andrews, Chandler, Ansoff, Mintzberg and Porter
  • Blue Ocean Strategy 
  • Social media memetics (please note that this is not a course on digital marketing, but focuses on strategy which applies to all media)
  • Vacansopapurosophobia 
  • The crucial role of problem definition 
  • The relationship between goals, objectives, strategies and tactics (untangling the mess) 
  • And plans? Where do they fit it? 
  • Insights - the real thing
  • Why strategies are stories: Kamishibai 
  • The inverted pyramid and other communication essentials to get your strategy across 
  • Digital overview (and why nothing has changed since Pompeii) 
  • Deliberate, unrealised and emergent strategies 
  • Occam’s Razor applied to: Consumer Based Brand Equity, Positioning and Segmentation 
  • Sadistic statistics 
  • When research goes horribly wrong 
  • Brand ecosystems 
  • Pitching for new business

 * Course content can be improved without notice


  • Loved it - would highly recommend
  • Awesome stuff - gave me great insights
  • I now 'get' strategy
  • I thought it would be boring
  • Excellent content
  • I can apply what I learnt
  • More interesting and exciting than I thought
  • Informative and entertaining
  • Loved all the examples
  • I just wanted to thank you for the very insightful workshop. I found the course outline very entertaining and the content was fascinating
  • My colleagues and I thoroughly enjoyed it and look forward to the next one

"I attended your course over 10 years ago. The impact it had on my life was immense. Thank you."
Tseko Shibambu


The course is facilitated by Sid Peimer. He has planned in virtually every category - from start-ups to blue chip; from prescription drugs to FMCG. He has also mentored and trained strategic planners who have made their mark in the industry today. Sid qualified in pharmacy, completed his MBA at the University of Cape Town, but woke up with a jolt to discover the creative world of marketing and advertising. The agencies he worked for before establishing Stratplanning include Grey, Leo Burnett and Ogilvy. His life reads as somewhat of an adventure novel, covering many eclectic areas: shop assistant, CEO of a chemicals company, door-to-door salesman, copywriter, creative director, national franchise manager, retail pharmacist, laboratory assistant, professional actor, suntan sprayer, karate instructor, SARA-rated river guide and lecturer in marketing & consumer behaviour. And of course - strategist. He is a popular speaker and trainer for both the private, academic and NGO sectors. He is the author of Business for the New and the Free which was prescribed by Damelin College for their Business Enterprise course, as well as The Clear Win available on Amazon. He lives in Cape Town, consulting and training in strategy nationwide. He writes extensively for Bizcommunity and is the 1973 Paarl Coca-Cola yo-yo champion. 


Thousands of people have benefited from Stratplanning’s training and consulting, some of which include:

ABSA, Barclays, KPMG, Mr Delivery, Saatchi & Saatchi, Cell C, FCB, Department of Public Enterprise, Engen, Etv, Ireland Davenport, Joe Public, Johannesburg University, Juta, King James, Netcare, Ogilvy Healthworld, Old Mutual, Sanlam, Spur Restaurants, Standard Bank, TBWA, The Hardy Boys, Woolworths, The Jupiter Drawing Room, Virgin Money, Y&R, 25AM, AAA School of Advertising, Admakers, AdVentures, AdVTech, Affinity, Africa Red, Afrikings, Afrisam, Aristos, Atmosphere Communications, Artifact, AVstage, Bakgone Consultancy, Beachhead Media, Berry Bush BBDO, Black Sash, Blast Brand Catalysts, Boomtown, BrainReserve, Brandsmith, Cape Cookies, Cape Peninsula University of Technology, Caxton Magazines, Chillibush, Conceptualise, Creative Counsel, Creative Performance, Creative Zoo, DDB South Africa, Delirium Advertising, Department of Public Enterprise, Derrick, Elements, Expotrends,  Faction Media, FD Communications, Fine Healthcare, Forwardslash, Fountainhead, Four Pin Plug,  Fuse Net Solutions, Havas, Healthshare, Hellocomputer, Hot Salsa, Idea Engineers, Imperial Bank Medical Finance, Indigo Marketing, Inroads Advertising,  Inzalo Communications, iProspect, Legal Resource Centre, Leo Burnett, Lesoba Difference, Lobedu Leo Burnett, LoweBull, Luci Ferin, McEwan Advertising, Media Assault, Media Shop,  Mediacore, Medshield, Metropolitan Republic, Missing Link, Mortimer Harvey, MSC Business College, MEC Carat, Multichoice, Naledi Media, Native, Nelson Mandela Metropolitan University, Nedbank Limited, Nine Yards Communications, Nkuzi Development Association, Now Media, Oaktree Marketing, OFYT, ORD, Paddington Station, PR Worx, PRIMAproximity, Promise Group, Publicis, Purpleberry, Radioheads and United Stations, Red Cross Children's Hospital Trust,  Regenesys, SA Institute for Advancement, Robot Dwarf, SA Institute for Security Studies, Sabinet Online, Salient, Singh & Sons, Statosal, Strategic Shift, Strika Communications, Studentwise, Studies in Poverty and Inequality Institute, The Media Connection, The Mediashop, Time-Square, Traffic Integrated,  Troika Imagineering, TWT, Underline, Unilever, University of Johannesburg, University of Pretoria, University of the Western Cape, University of the Witwatersrand, Volcano Advertising, Vega, Western Cape Department of Economic Development and Tourism.

Book your course today. 
Email info@stratplanning.com or call 082 659 9167


This intensive half or one day course reveals the strategies that work; debunks the myths that don’t. Filled with empirical evidence, anecdotes and examples, if winning new business is important to you, this is one course you can’t afford to miss.



  • Empirical Evidence (what winners actually do that’s different to losers)
  • The library of the mind; the theatre of the heart
  • The key attributes affecting the client’s choice (that research shows)
  • Clarity and story structure
  • What winners do that’s different (with empirical evidence)
  • The damaging effects of entropy
  • The 3rd target market
  • The Marcia Clark mistake
  • Key message management
  • Mission statement failure
  • Beware the hidden X
  • And more …



  • The half day course consists of a two hour presentation followed by a practical pitch exercise
  • The full day course has an additional practical module to reinforce the learnings, and also touches on presentation skills.



  • “This is brilliant.”
  • “This is for everyone – not only those in marketing.”
  • “It just makes so much sense.”
  • “We know pitching, but Sid’s session has made an enormous impact to the pitch psyche inside the company.”



Sid has pitched on everything from FMCG to Government. Together with extensive research and international training, he began to develop an ‘eye’ for what wins the pitch and what does not. Together with this knowledge and having supervised over hundreds of simulated pitches, you are sure of getting the right information from the very best source.

Read more about your facilitator here.



Contact Sid Peimer at sid@stratplanning.com or 082 659 9167


First two fallacies to debunk right away:

  1. Consumers think in a well-reasoned or rational linear way
  2. Consumers can explain their thinking and behaviour.

Although the consumer’s mind will always be an enigma, understanding the context of insights can make an enormous difference to the success or failure of your communication.

There are just some things that consumers can or can’t do, no matter how much sense our offer makes. For instance, while sitting at your desk, lift your right foot off the floor (make sure it’s the right one) and make clockwise circles. Now, while doing this, draw the number "6" in the air with your right hand. Your foot will change direction. There is nothing you can do about it. Although this is very interesting, can it be an insight? There’s only one way to find out – Insights Uncovered.


This is a three hour in-house presentation.



  • Towards a commercial definition
  • Finding insights
  • The consumer’s very strange form of logic
  • What is and what is not an insight
  • Why insights are important
  • Why insights are not important
  • The relationship with brand philosophies
  • Choice and Chance
  • The Gambler’s Fallacy
  • Confirmation Bias
  • The Conjunction Fallacy
  • Romance and Animal Behaviour
  • Arousal (in a commercial sense)
  • Ehrenberg’s Double Jeopardy
  • Incorporating insights into dipstick research
  • Finding insights from data
  • Priming
  • The naïve academic models of decisionmaking, and why they don’t work
  • Consensus maps and the limbic system
  • A few Freudian tits and some other fun stuff.


Sid Peimer’s varied background has been the ultimate laboratory for trying to make sense of it all. Although marketing is a poor area for the scientific method, Sid backs up his theory with robust proof from the academic world.

Read more about Sid here.

Sid Peimer
From the man who brought you the magnet on the back of the Mr Delivery booklet! *



Gone are the days of competing on extra features, lower cost production, and an increased distribution footprint. Anyone can copy anything a lot faster than before. Today the game is about differentiation. And the only way you can differentiate is to innovate.

Companies are not natural incubators for innovation. Failure is frowned upon as ‘wasted funds’ and projects are either shelved after the feasibility exercise or considered too ‘way out’ to become a substantial part of the business. Admittedly one thing that has not changed is where our focus should be: the bottom line. Unfortunately we’ve become so focused on that, that we lose sight of what we could do. We might not even have the resources, but one thing we should have is the appetite.

Innovation Generation is a one day workshop to give you a perspective that will remove the blinkers, allowing you to tap into revenue streams that may never even have entered your mind, whether an adaptation of an existing offering or something fresh and lucrative ‘we should have done ages ago’.

The workshop does not necessarily serve as merely a day to focus on innovation, but offers a lasting roadmap for inculcation of innovation into the culture of the organisation. It’s exciting, informative and initiates the resources you need for competitive innovation.

Welcome to the Innovation Generation.


  • This is a one-day workshop available in-house only.
  • It is an interactive workshop comprised of formal presentations and practical exercises to reinforce the learnings.
  • Delegates are encouraged to dress for the weather. No suits and ties.


Contrary to ‘pop’ strategy, it’s a myth that anyone can be creative (sorry, but that’s the truth). Society values creativity, however it also values stability. We do not want our accountants or airline pilots to be creative (except in an emergency). Creativity is not a measure of your value to the organisation’s growth. However, that does not disqualify you from being innovative.

  • The difference between ideas, creativity and innovation
  • The very crux of innovation: A problem defined is a solution found
  • Differentiation and the Intangible Value Multiple
  • The myth of the epiphany
  • Giving customers what they want
  • Why people don’t know what they want
  • Wicked problems
  • The barriers to innovation
  • The Boyd Loop
  • Design Thinking
  • The role of creativity
  • Overcoming structures that stifle innovation
  • The eBay Pez story, Newton’s Apple and other lies
  • Creating a culture of innovation -  why it’s impossible
  • Creating fertile ground for innovation
  • The walls have brains: the influence of your immediate environment
  • Osborn’s Brainstorming basics and other communication aids
  • Who’s line is it anyway?: accepting all offers
  • Researching for innovation
  • Selling innovation internally
  • Implementation and management of the new


There is no specific criterion for attendance - innovation pervades the entire organisation.


Sid Peimer has stimulated innovation in virtually all categories from FMCG to Government. Blue chip to start-up. He is qualified in pharmacy and has an MBA from the University of Cape Town. After extensive training, he won the Paarl yo-yo championships in 1970 – no small feat considering the town had no access to TV.

His life reads as somewhat of an adventure novel, covering many eclectic areas: shop assistant, door-to-door salesman, copywriter, creative director, national franchise manager, retail pharmacist, manufacturing pharmacist, laboratory assistant, professional actor, suntan sprayer, karate instructor, SARA-rated river guide and lecturer in marketing & consumer behaviour.

He is a popular speaker and trainer for both the private and NGO sectors. He is the author of The Clear Win - Pitching for new business, the strategies that work; the myths that don't - available on Amazon (only $3 on kindle!).

He lives in Cape Town, consulting and training on strategy.
He writes extensively for Bizcommunity – his profile and articles can be found on Bizcommunity here and Stratplanning here.


For price and availability contact Zelda Lawson today on 084 387 1901 or mail zelda@stratplanning.com
For course content enquiries contact Sid Peimer on 082 659 9167 or sid@straplanning.com

Welcome to the Innovation Generation.

* Sid was consulting to Laurence Levine, the founder and owner of Mr Delivery. While sitting in Laurence’s office, a cardboard advertisement appeared with a magnet on the back. The conversation then migrated to the idea for application of the same on the Mr Delivery booklets. The printers were called in and Laurence and Sid were told that it was not possible. Sid, realising that it would enable Mr Delivery to have a ‘billboard’ on millions of fridges, persevered and found a magnet manufacturer in Cincinnati. He and Laurence went to visit them. The rest is history. It is unclear who then recommended the ad on the front page of the booklet, but Sid was part of that process. Anyway, kudos to Laurence for his vision of getting a booklet on the fridge of nearly every home in South Africa. Sid also went on to help invent additional add-ons to Mr Delivery, such as the Tell ‘n Sell concept, amongst others. Imagine what Sid could do for you.


In-house 1 day course.


The quality of a presentation impacts the perceived quality of the work being presented. A presentation based on sound knowledge of the attractors and detractors of presentations, combined with the unique traits of the individual presenter can make the difference between sale or fail.

This course is designed for the person who is prepared to take an honest look in the mirror, and hone the appropriate skills required to not only present their case more effectively, but to feel empowered and comfortable when presenting. It is not designed to turn delegates into automatons of the ‘correct way to present’, but to leverage their own unique personalities for more impactful and persuasive presentations.

Although this course is very challenging, it is also a fun and rewarding process as the delegates begin to gain mastery over their presentation skills.


This is a one-day course that starts at 9 am and finishes no later than 6pm.





  • Constructing clear and persuasive content
  • Discovering the objective
  • The crucial importance of body control
  • Leveraging your voice for maximum impact
  • The persuasive aesthetics of PowerPoint
  • Examining detractors and debunking myths
  • Flow, pace and story structure
  • The discipline of PechaKucha 20x20
  • Managing anxiety
  • How to turn hard questions into soft conversations
  • Defining your X, containing your ego
  • The pre-flight checklist



  • There are approximately 2 hours of presented content interspersed between practical delegate assignments.
    Practical sessions will be videotaped for individual delegate feedback.
  • This will be done in an open forum (ie everyone will see everyone else’s presentations).
  • Each delegate will come prepared with a 5 minute presentation, preferably of current work, which they will present at the start of the course.
  • This must be no longer than 5 mins – they will be cut off should they go over.



  • R2 500 per person
  • Minimum of 6 delegates, maximum of 10.
  • No VAT payable
  • Venue and refreshments/lunch for client’s account.
  • Travel and accommodation for Stratplanning’s account.
  • 50% deposit secures date, balance COD.


Sid Peimer
t: 082 659 9167
e: sid@stratplanning.com

5th March 2014, Johannesburg

Thank you for attending the Strategy Boot Camp.

Download Presentation here.
[NOTE: : Please note, file is 10 MB ( best to right click and ‘save as’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

20th February 2014, Cape Town

Thank you for attending the Strategy Boot Camp.

Download Presentation here.
[NOTE: : Please note, file is 5 MB ( best to right click and ‘save as’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

9th April 2014, Cape Town

Thank you for attending Strategy Unplugged.

Download Presentation here.
[NOTE: : Please note, file is 5MB ( best to right click and ‘save as’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

14th May 2014, Johannesburg

Thank you for attending Strategy Unplugged.

Download Presentation here.
[NOTE: : Please note, file is 4.2MB ( best to right click and ‘Save Link As...’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

26th June 2014, Cape Town

Thank you for attending Strategy Unplugged.

Download Presentation here.
[NOTE: : Please note, file is +- 5MB ( best to right click and ‘save as’)]


Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

16th July 2014, Johannesburg

Thank you for attending Strategy in a Day.

Download Presentation here.
[NOTE: : Please note, file is +- 4MB ( best to right click and ‘save as’)]


Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

29th October 2014, Cape Town

Thank you for attending Strategy In a Day.

Download Presentation here.
[NOTE: : Please note, file is +- 14MB ( best to right click and ‘save as’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

18th November 2014, Adcock Ingram Critical Care

Thank you for attending Strategy In a Day.

Download Presentation here.
[NOTE: : Please note, file is 14 MB ( best to right click and ‘save as’)]

Further enquiries, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com

Embodied cognition and why you should bungee jump on your first date.

Why is an ad showing a piece of cake more engaging when the fork is placed to the right of the cake? Enter the field of “embodied cognition” – the idea that without our conscious awareness, our bodily sensations help determine the decisions we make. For example, people who held a warm beverage were more likely than people who held a cold one to think that a stranger was friendly. (1) I should imagine this excludes alcoholic beverages such as beer where everyone in our proximity is a mate – here the colder the better.

So why the fork to the right of the cake? Most of us are right-handed, so in the majority of cases the fork to the right evokes a motor response in our brain where we interact with the object since our minds mentally simulate the experience. And repeated studies show that depicting a product that makes mental stimulation easier, results in a heightened purchase intention. (2)

Embodied cognition can be seen at work where research shows that participants nodding their heads up and down leads to increased persuasion of an editorial message. Also, People holding a pen between their teeth (stimulating the muscles used for smiling) evaluate funny cartoons to be funnier than when holding a pen between their lips (inhibiting the muscles used for smiling). (2)

Enter an interesting experiment conducted by Donald Dutton and Arthur Aron as far back as 1974. (3) If you’ve never encountered the phenomenon of ‘misattribution of arousal’, I am delighted to let you in on it. The experiment was a simple one. Firstly two locations were chosen – the first was a very rickety swing bridge (called a fear arousing bridge) and the second was a more stable one that elicited no fear reaction.

A pretty young lady stood with a clipboard in the middle of the fear-arousing bridge and when a young man crossed the bridge she would ask if they would please fill out her short questionnaire. The same was done on the stable (non fear-arousing) bridge. After they had completed the task, the young lady thanked them and offered to explain the experiment in more detail when she had more time, giving them her phone number to call. What was actually being measured was whether the young men would call ‘to discuss it further’. Of those on the fear-arousing bridge, 50% called her, whereas only 13% on the more stable bridge called. The cause for the discrepancy was ‘misattribution of arousal’. Basically it means that people make a mistake in assuming what is causing them to feel aroused. Those on the fear-arousing bridge were more likely to attribute their heightened emotional state to the young lady and made the assumption that it was her that made them excited, as opposed to their body’s natural reaction to perceived danger.

Similarly, the Schachter-Singer theory states that emotion is based on two factors: firstly the degree of physiological arousal and secondly the cognitive label we give to it. (4) In other words – how it makes us feel and then how we explain it to ourselves. The men on the scary bridge were aroused because of the physical attributes of the bridge (it was very narrow and above a deep ravine), however they misattributed the arousal – they thought it was the woman.

So next time you’re on a hot date, try some bungee jumping, but make sure he/she is looking at you when you take the plunge.


  1. The Science of Sensory Marketing. Harvard Business Review, March 2015.
  2. Ryan S Elder, Aradhna Krishna. The “Visual Depiction Effect” in Advertising: Facilitating Embodied Mental Stimulation through Product Orientation. Journal of Consumer Research, August 2011. http://www.indiana.edu/~abcwest/pmwiki/CAFE/visual%20depiction%20effect.pdf
  3. Donald G Dutton, Arthur P Aron. Some Evidence for Heightened Sexual Attraction Under Conditions of High Anxiety. Journal of Personality and Social Psychology, 1974, Vol 30, No. 4. http://gaius.fpce.uc.pt/niips/novoplano/ps1/documentos/dutton%26aron1974.pdf
  4. Two-factor theory of emotion http://en.wikipedia.org/wiki/Two-factor_theory_of_emotion


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Six traps that will lose you market share

In physics, the Law of Conservation of Energy states that energy can neither be created nor destroyed – it can just change from one form to another. However we are not constrained by this law in commerce when it comes to demand – new demand can be created. 

With market power moving from the producer to the consumer, and global competition intensifying, we can’t afford to chase market share in the same old way.

We need to create, what the authors W. Chan Kim and Renée Mauborgne refer to as Blue Oceans, and stay away from Red Oceans. A Blue Ocean is uncontested market space where demand is created, as opposed to Red Oceans which is a zero sum game – one company’s gain is another company’s loss.

So the whole idea is to go for Blue Oceans where industry structure and market boundaries exist only in your mind – you don’t have to chase customers by just delivering more for less – you can actually create demand.

Here are six traps that will keep you in Red Oceans (adapted from W. Chan Kim and Renée Mauborgne. Red Ocean Traps. HBR, March 2015).

Trap 1: Seeing it from the customer’s perspective

The customer might be right, but the customer does not always know. We tend to keep our focus on existing customers and how to make them happy. When Sony launched the PRS e-reader, they aimed to open up a whole new market space. Existing e-reader customers were unhappy with the size and poor display quality of e-readers on the market, so Sony came out with a thin lightweight device with an easy-to-read screen. The problem was that most people stayed away from these devices, not because of the physical features of the product, but because of the shortage of available books. Amazon got it right when they launched the Kindle in 2007 with more than four times the number of titles than the PRS and also making them easily downloadable over wi-fi. Sony has since departed the e-reader market, whereas Kindle now offers more than 2.5 million titles.

Trap 2: Going for a niche market

There is a difference between uncovering a niche in an existing market space versus identifying a new market space. In 2003 Delta Airlines decided to focus on stylish professional women travellers, and came up with a plan (after numerous focus groups) to cater to them with organic food, custom cocktails and free exercise bands amongst other things. The brand was called Song, but sadly the segment was just too small and Song closed down in 2006. There was certainly a gap in the market but sadly no market in the gap.

The British food chain Pret a Manger approached it a little differently. They looked at three sets of consumers: restaurant-going professionals, fast food customers and those who brought their own lunch (the brown bag set). There were lots of differences between these groups, so at first glance they appear to be three separate niches. However they also had three things in common: they want fresh and healthful lunch, want it quickly and at a reasonable price. So what Pret a Manger did was to offer restaurant-quality sandwiches made fresh every day with quality ingredients, prepared even faster than fast food. All delivered at a reasonable price. They created a new market space by unlocking this aggregate untapped demand, as opposed to just going for one segment.

Trap 3: Confusing innovation with creating new markets

Innovating with value, not technology is what creates commercially compelling markets. The Segway launched in 2001 as the world’s first self-balancing human transporter. It was an amazing invention – lean forward and you go forward; lean back and you go back. It was one of the most talked-about innovations of its time. However, it wasn’t cheap and came with some unresolved issues. For instance, where would you park it? Could you use it on pavements or roads? Could you take it on a bus or a train? Sales fell way short of projections and the company was sold in 2009. An article in Time magazine phrased it nicely: “One of the hardest truths for any technologist to hear is that success or failure in business is rarely determined by the quality of the technology”.

Granted Uber’s technology works, but it is not the sole reason for its success. It has succeeded because it is simple to use, fun and productive – people fall in love with the value offering, not with the technology.

Trap 4: Equating creative destruction with market creation

Creative destruction occurs when a new innovation displaces an existing technology. Digital photography ‘destroying’ the photographic film market would be an example.

Creating new markets does not always have to lead to destruction. Viagra, for example, introduced a whole new class of drug, not displacing any before it. It unlocked new demand by offering a solution to a real problem that men experienced in their personal relationships. Market-creating moves are non-destructive when they offer solutions where none existed previously.

Trap 5: Relying on differentiation

Market creation is not synonymous with differentiation. In 2000, BMW launched the C1 – a solution to traffic congestion. It was a two-wheeled scooter going for the high end market. Unlike regular scooters, it had a roof, windshield (with wipers), an aluminium roll cage and a crumple zone around the front wheel. If you had fears of safety on two wheels, they could be put to rest. Unfortunately the C1 was expensive, coming in at substantially more than what a regular scooter cost. Although we have a clear example of the C1 differentiating itself in the scooter industry, it did not create the new market space in everyday transportation. In 2003, Production of the C1 ceased.

Trap 6: Providing more for less

Trying to create a new market by just driving down costs is the flipside of the BMW example above. When we rely on low cost as a strategy, we tend to ignore what we should improve or even create to increase the value of our offering. It is however still possible to differentiate and reduce cost. Swatch for example does that with its stylish, fun and fashionable designs – here we have an elegant example of both differentiation and low cost which resulted in creating new demand. A new market does not however have to be created at the low end – Starbucks took a simple cup of coffee and gave an experience that demands a price premium – and coffee has never been the same since.

These Red Ocean traps are not necessarily bad strategies – sometimes breakthrough ideas do come from customers, however they leave you in contested market space where one person’s gain is another’s loss. So sometimes to experience market growth it pays to actually grow the market itself.

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Five beliefs about strategy execution that are just plain wrong.

At the conclusion of strategy sessions we identify objectives and allocate responsibilities with timelines. It’s all very clear. But why then has it been found that strategy execution is the number one challenge facing global CEO’s – even more important than innovation and geopolitical stability? A recent article in the Harvard Business Review alludes to the reasons why. In an (ongoing) study of 8 000 managers in 250 companies spanning a period of nine years, we find out that our most logical assumptions about why strategy execution fails are just plain wrong. (1)

 Myth 1: Execution equals alignment

Once the strategy is complete, the logical process would be to set objectives, cascade them down the hierarchy, measure how it’s going and reward performance accordingly. So if everything is aligned, then the execution must surely follow? So when things break down, we tend to identify a break in this chain as the cause of the hiatus. But we would be wrong.

When asked if they can rely on their boss or direct reports, 84% of managers say they can. So there’s no problem there. However, when asked if they can rely on colleagues in other functions and business units, the answer becomes clear: the figure falls to 9%. They also say that they are three times more likely to miss milestones because of inadequate support from other units than their own team’s failure to deliver. The fault lies not in the stars, nor in ourselves, but those outside the inner circle.

 Myth 2: Execution means sticking to the plan

No plan survives contact with reality. We need to adapt to what’s happening, overcome the inevitable unexpected obstacles and take advantage of fleeting opportunities. All this requires a lot of agility. When asked to identify the greatest challenge they face in strategy execution over the next few years, nearly one-third of managers cite difficulties in adapting to changing market circumstances.

 That means you need to change resource allocations, but we seldom do that – once the resources are allocated we tend to stick to the game plan. According to a study by McKinsey, companies that actively relocated capital expenditures achieved an average shareholder return 30% higher than those that were slow to shift funds.

 Myth 3: Communicating equals understanding

Nearly 90% of managers believe that the top echelon communicate the strategy frequently enough. The harsh reality is that only 55% of middle managers surveyed could name even one of their company’s top five priorities. That means when the leaders explain strategy to the troops who are given five chances to name the company’s objectives, nearly half can’t even get one right.

 Senior executives are shocked when they see how poorly the company’s strategy is understood – surely with all the emails and meetings, the strategy should be clear? Middle managers are also in agreement – nearly 90% say that the execs communicate frequently enough. So why so little comprehension if everyone feels that there’s enough communication? The problem is that we measure the communication in terms of what we do – meetings, emails and other activities to bring the strategy alive. What we should be measuring is how well people understand what’s being communicated.

 Myth 4: A performance culture drives execution

As the poet Henry Longfellow reminds us: We judge ourselves by what we feel capable of doing, while others judge us by what we have already done. In the corporate world you need to be seen performing. It’s performance that counts. So generally companies tend to have robust performance cultures – but still struggle with strategy execution.

 The reason is that you can’t just have a culture of performance – other traits need to be recognised and rewarded – things like agility and teamwork. We place less value on a manager’s ability to adapt to changing circumstances – a measure of agility – than on whether they hit their numbers. We tend to avoid experimentation – half the managers believed that their careers would suffer if they pursued but failed at new initiatives. Agility requires the willingness to experiment, and we avoid experimentation because of fear of failure.

 A focus on the numbers can also constrain execution if we believe that hitting the numbers is all that counts. The result is a conservative estimate giving, at best, conservative results. When it comes to recognition, past performance is two to three times more likely than a track record of collaboration to be rewarded. Performance is critical, but when it comes at the expense of coordination and agility, the result is a failure in execution.

Myth 5: Execution should be driven from the top

Decisions that always emanate from the top may boost performance in the short term, but degrade the company’s ability to execute over the long term. Execution should be driven from the middle. That includes not only the middle managers, but also experts who occupy key positions in the informal networks that get things done. Eighty percent of this middle tier say they are committed to doing the best to execute the strategy, although they would like more clarity on what the strategy actually is.

 When execution falters, we tend to reduce everything to a single dimension – if all we have is a hammer everything looks like a nail. So we focus on improving existing processes and do more strategic huddling and better performance measures. The problem is that this ignores the need for coordination and agility and we tend to commit the worst sin of all: finding the right answer to the wrong question.


Donald Sull, Rebecca Homkes, Charles Sull. Why strategy execution unravels – and what to do about it. Harvard Business Review, March 2015.

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How do you know your strategy is any good?

The 1958 French film Les Almants (The Lovers) was about a woman involved in adultery. Directed by Louis Malle, the film was a hit in France, but when it crossed the Atlantic to the US it was met with horror by the authorities who felt the material was obscene. The result was the Jacobellis v. Ohio court case where the theatre owner was initially fined for showing pornographic material. However, the court subsequently reversed its opinion where Judge Potter Stewart made his now famous statement concerning pornography: “I know it when I see it…”

Here are 10 attributes to judge your strategy by, so you can ‘know it when you see it’:

1. Is it clear?
Strategy is an inherently messy endeavour. A good strategy is one that provides a clear picture, not only of the situation, but also provides a solid basis from which to make decisions. Anyone should be able to understand it. Granted some industries are highly technical where you won’t survive without the three-letter acronym, but if there’s no clear argument then its value is limited – you might as well just have had a discussion about the issue. More meetings.

2. Does it ask and answer the right question?
Do you clearly define the problem, identify the causes of the problem, and why and how you are going to solve the problem? I use the word ‘problem’ not in the sense of tackling a thorny issue, but what the issues are that the situation analysis reveals. It’s about framing the challenge correctly so that you can avoid the pitfall of getting the right answer to the wrong question.

3. Is it objective?
Leaders have been described as seeing things as they are, not how they would like them to be. Strategies should be held to the same standard. When beginning a strategy the first and most important step is to suspend judgement. It then makes it a wonderful journey of discovery – which it should be.

4. Is it a treatise as opposed to a strategy?
If you’ve written War and Peace, chances are you’ve put things into context that didn’t need to be. Serving up volumous amounts of data is often our insecurity showing up. Granted, a lot of information sits nicely with a large invoice, but if you’ve told a clear story using the relevant facts, no one should complain that the document/presentation was too short.

5. Have you taken it to the next step?
A strategy document is a basis for decision making. That infers some action will need to be taken. If you’ve just presented the facts, you’ve come up short – the strategy should be a clear basis from which to make the next decision. It does not have to provide a definitive answer, but needs to be the foundation from which one can be arrived at.

6. Is it inspiring?
The strategy is seldom the main event in advertising, and is the procedure (or requisite ‘premumble’) we need to go through so that we can get to the creative work. Granted, tables and graphs are no match for a full colour DPS, but the strategy should be inspiring enough to be an event on its own.

7. Is it unique?
Strategies are very much like puzzles – you can’t take pieces from different puzzles to build a picture – it just won’t work. Each strategy must tell its own story – inserting a scene from another story just confuses the whole issue.
Unlike a good soufflé which depends on a tried and trusted recipe, putting together a strategy should never be a fill-in-the-blocks exercise. Although results of your soufflé will vary depending on things like the type of the oven, ambient temperature etc, it’s a good idea to stick as closely to the recipe as a possible to prevent a flop.
Strategies are a different kettle of fish: although the qualities of a good strategy are synonymous, there is no one size fits all.

8. Does it answer the brief?
When you’ve presented a strategy and client looks confused, the little voice in your head screams “But that’s what you briefed me!”
What you have just suffered from is the fact that you just took the brief as opposed to discovering it. It’s not your job to be told exactly what to do – your job is to find out – to define the problem correctly.

9. Have you used tools with restraint?
Strategies determine the future and are essentially about risk. Only a few hundred years ago, the risk management toolkit contained little more than a leap of faith and a glimmer of hope. There were no calculators and it wasn’t easy multiplying XXIII by VI. Things have changed today where we have the pleasure of numerous tools at our disposal and PowerPoint has become the catapult of modern times. Sometimes restraint is better – just because you can easily draw a bar chart with 20 labels, doesn’t mean that your strategy is necessarily better.

10. Are you high enough?
Terrain is best viewed from above – have you incorporated enough of the surrounding landscape such as marketing trends and competitor activity? Every story needs to have a setting that provides the context for your strategy. You need to describe the story from best altitude: not too high; not too low; just right.

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Satisfied customers don’t mean repeat business

We ask customers how satisfied they are, because we think that satisfaction means profitability and growth. That’s not necessarily true. Also, those lengthy feedback forms may give us lots of data, but do very little when it comes to telling us about future patronage. After two years of research with thousands of respondents, Frederick Reichheld showed that the real feedback you want is deceptively simple. It actually just boils down to one question. (1)

Just to stay in the good books

When you buy a new car, the inevitable customer satisfaction form will make its appearance at some stage. The car manufacturers spend a lot of time and money monitoring customer sentiment; after all they need to know that the buyer is getting the required experience from the dealer.

When a car manufacturer, after having spent millions on customer satisfaction surveys, wondered why there was no correlation between the ratings of the dealers and their profitability, the dealers were quick to point out that there were more important factors that affected the bottom line. This included keeping pressure on salespeople, filling showrooms with prospective buyers through aggressive advertising and getting the highest possible price per car. They also sheepishly stated that it was all a bit of a charade really to remain in the good books of the manufacturers so they could get better allocations of new cars. (1)

When I purchased a car recently I received an urgent plea from the salesperson to “Please give me a 10 on all scores”. I was somewhat taken aback and only ready to give a 10 for chutzpah. The said questionnaire, however, never arrived.

The leaking customer bucket

The fact that loyalty affects profitability and growth is easy to substantiate – you can’t grow a company if you have a leaky customer bucket. Fiercely loyal customers are also advocates for the brand and are risking their reputation through their recommendation. Customer retention rates are a measure of loyalty, but the problem is it measures the rate at which the bucket is emptying (or rather not emptying) as opposed to filling up.

Customer satisfaction has also been found to be flawed. The American Customer Satisfaction Index published in the Wall Street Journal shows the satisfaction ratings of 200 companies, but it is difficult to find a correlation with high customer satisfaction and sales growth. So Reichheld did something that would provide the answer – he would match survey responses with actual behaviour. He administered a test with roughly 20 questions to thousands of customers (the test is called the Loyalty acid Test available here http://www.loyaltyrules.com/loyaltyrules/acid_test_customer.html ). After analysing the purchase history for each person the answer was clear.

The only question you need ask

Although Reichheld expected to find a cluster of questions that would correlate with repeat purchase or referrals, he found something quite perplexing – there was one question that predicted whether people would buy and/or refer:

“How likely is it that you would recommend Company X to a friend or colleague?”

Taking it one step further, they analysed responses to the question by using a scale where ten means “extremely likely” to recommend, five means neutral, and zero means “not at all likely.” After analysing customer referral and repurchase behaviours on this scale, they found three clusters. “Promoters,” who gave ratings of nine or ten to the question, the “passively satisfied” gave a seven or an eight, and “detractors” from zero to six. The amount of net promoters (percentage of promoters minus the percentage of detractors) was then plotted against company growth. The results were astounding: you can’t have revenue growth without improving your net promoter number.

Although there are always exceptions (such as companies that grow with population growth irrespective of sentiment), the path to sustainable growth starts with creating more promoters and ensuring less detractors. As Reichheld says, “It’s that simple and that profound”.

So before you think that your extensive questionnaire will yield lots of information and clues to fuel future growth, maybe you just need to one question: “Would you recommend us?”

1. Frederick F Reichheld. The One Number You Need to Grow. Harvard Business Review, December 2003. https://hbr.org/2003/12/the-one-number-you-need-to-grow
Although this reference is more than 10 years old, the principles remain valid and illustrate once again how difficult we find it to focus only on meaningful data.

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Brand loyalty – a thing of the past for technology brands?



This year’s Consumer Electronics Show will feature everything from biometric socks and other ‘wearables’ to 3D printers, drones, robotics, virtual reality and TV’s where the clarity is best described as ‘breath-taking’. However, in the recent Brandwatch Report on consumer technology it was reported that 78% of consumers are not loyal to any one particular brand. I have not seen the original research, but I have seen the writing on the wall for technology brands where both genders value features at a decent price above all other factors.

 Where has loyalty gone?

 Of all the factors taken into consideration when purchasing a tech product, brand loyalty is not a major determinant as can be seen in the table below:


So what has changed?

The question is what has changed. The answer is simple: the amount of information readily available at the swipe of a smartphone screen. Before the advent of social media and product review sites, we were relatively in the dark, or at best we could ask a relative like an uncle, but you had to essentially trust the information that the brand was giving you. That’s where you got educated.

However, today school’s out and we no longer need the brands to teach us where value lies. When Apple launched the iPad, it virtually owned the tablet market. Today, the category of ‘other brands’ holds the major market share. The market has become much more fragmented, because people can find out about a new brand from sources other than the brand itself. Sources they trust.

The dissatisfaction with 3D

A few years ago we were told that 3D TV was the next big thing. However the social stratosphere were less than enamoured with complaints of having to wear the bulky glasses to watch something which had the occasional nasty side effect of nausea. Not something to get people to talk about positively. Take this comment from CNet’s TV Buying Guide (http://www.cnet.com/topics/tvs/buying-guide/)

The main thing you need to know is that every 3D TV is also perfectly capable of playing 2D content, too, so we prefer to think of 3D as an extra feature as opposed to a separate type of television. It’s also largely unnecessary. Lack of content is king; most people with 3D TVs never use the 3D feature.

When Voucher Codes Pro in the UK asked owners how they felt about their purchase of their 3D TV’s, nearly 80% ‘regretted buying a 3D TV’ and Over 60% cited ‘lack of 3D films and channels’. One can understand the gusto of manufacturers to bring this to market, but without content it was pretty much an exercise in dissatisfaction. The problem occurs when you have to look at this thing in your lounge every day, building up resentment to the badge on the front. Chances are your next TV won’t be the same brand. However, who knows what you might buy once you’ve been educated by the market.

It’s amazing how history repeats itself. Philips Electronics brought out the magnificent HDTV in 1980; unfortunately they were 20 years too early. The hi-definition cameras and transmission standard – which were needed to make HD deliver – failed to arrive in time. It cost the company US$2.5bn in the form of write-offs.

4K TV’s to go the same way?

4K TV’s may suffer the same fate. If you Google ‘review 4k TV’, right up top in the organic search is CNET’s review titled ‘Why ultra HD 4k TVs are still stupid’. Basically the argument is that there are more important aspects to picture quality than just resolution. They use a great example to show the limits of picture clarity:

Go to the beach (or a big sandbox, or a baseball diamond). Sit down. Start counting how many grains of sand you can see next to you. Now do the same with the grains of sand by your feet. Try again with the sand far beyond your feet (like, say, 10 feet away). The fact that you can see individual grains near you, but not farther away is exactly what we’re talking about here.

Granted, if you sat right up against the TV you’d see a clearer picture, but if you’re sitting at a normal distance, there’s nothing much in it. However we often don’t buy things for what they do, but for what they can do, so there will be some impetus for sales.

Social listening

Here’s where social listening comes in. Brandwatch analysed online activity and the problems become clear especially with the segment who want to watch movies. The file size is large and the UltraHD films are few and far between.  Also, with those who wanted to use it as a monitor, the fact that the smallest screens are 55 inches was also seen as a negative.

But even as I write this article, 8K is being released at the Consumer Electronics Show where the clarity is approaching the unbelievable. So the future of 4K is not certain, but consumer sentiment is a clear guideline to what one can expect. And for technology brands that means their most valuable source of intel is the information they don’t provide.

The consumer no longer depends on the advertising, the salesperson or the impossible-to-understand instruction manual. However, the information the consumer either contributes or consumes is openly available, so eavesdropping on the consumer has never been more crucial or available.

It’s all encompassed in that one word of advice I am given once in a while: “Listen”.

Reference: This article is largely based on the Brandwatch Report / Consumer Technology 2014. http://www.brandwatch.com


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How social proof affects our behaviour

Mrs Keech (a pseudonym) was gifted with automatic writing. Basically she got messages from The Guardians of outer space, and would share the information with a small group who also believed the messages to be real. It became a serious matter when one day The Guardians advised Mrs Keech that the world would end, and only she and her group of believers would be saved. The group, firm in their conviction, needed no social proof, and sold all their belongings in anticipation of the fateful night.

Social Proof existed before social media

Social Proof is a concept that existed before social media became so pervasive. Basically it says that the more people who find an idea correct, the more the idea is correct for everyone else. So we often look for cues on how to behave ourselves when we see the actions of others. A sort of herd behavior.

The Mrs Keech phenomenon is well documented, because three unbiased researchers joined the group and could relate in detail to what actually happened. The first phenomenon they noted was that pre-doomsday the group kept very much to themselves. In fact, they avoided publicity completely. The group was so sure of their beliefs and made no effort to try and convince the rest of us of the impending apocalypse.

The world does not end here

Anyhow, the moment arrived, and as you’ve probably guessed, the world did not come to an end. Some people started leaving the group. Mrs Keech then received the following message from the Guardians: because the group had believed them, they had saved the world from destruction. She then ‘received’ another message telling her to publicise the explanation.

So her behaviour altered completely – the policy of avoiding publicity changed – whereas previously the group kept to themselves, Mrs Keech now became zealous in trying to convince others to join the group. Once doubt crept in, more people needed to believe them, because the more people who find an idea correct, the more the idea is correct for everyone else. Social proof in action.

The Seattle pitted windshield epidemic

In the suburb of Belligham, Seattle people began noticing small pits in their windscreens. It wasn’t long before people thought they had discovered the cause – vandals using BB guns. However, the pitting started spreading to other suburbs with close on 3 000 complaints being received by the police. Additional theories began emerging: the new transmitter installed by the navy, cosmic rays from outer space, sand fleas, the earth’s magnetic field and believe it or not – gremlins.

The real reason was that people were, for the first time, looking at their windscreen and not just through them. The phenomenon took hold initially, because more and more people found the idea correct that other forces were at play, as opposed to the fact that having a pitted windscreen is the result of driving your car. Take a look at your windshield and you’ll probably see a small pit somewhere (sorry). The phenomenon of collective delusion took hold because of social proof – the more people who found the idea correct, the more the idea was correct for everyone else.

Donor fatigue

We all have a psychological accounting system in our brain. For example, if we were to lose a ticket on the way to an event, we are less likely to buy another one than if we lost the same amount in cash. There is an item ‘events’ in our brain, and having to buy another ticket meant that this account was substantially overdrawn. The loss in cash came from a different perceptual account so it makes it somewhat less painful to buy the ticket even though the net effect is the same.

We have an accounting system for all expenses, and especially one that relates to charitable donations. I believe that most of us have an item in our heads labelled ‘charity’ and once that reaches a certain number we stop giving. A point in case was the Tsunami where for the first time my non-profit clients were experiencing something called donor fatigue.

Everyone was giving to the Tsunami victims, probably because it affected all nationalities, but particularly the fact that it was so graphic and easy to ‘see’. Social proof swung into action when even the banks decided to advertise their charity accounts for the victims of the tragedy. The end result was, I’m glad to say, substantial support for victims of this tragedy, but unfortunately created secondary victims: those charities that required the funds from your perceptual charity account which had now been spent. It was de rigueur to donate – the social proof was all around us: the more people who found the idea correct, the more the idea was correct for everyone else.

Social proof finds application wherever there are people. Whether following an ideology or wanting the latest cool device – what everyone else is saying and doing affects us more than we think.

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There’s money in them thar ubiquitous connectivity.

Certain instances aside, such as when you’re driving with your spouse, it’s nice to know how you’re performing. The ubiquity of digital media has provided us with a treasure chest of data allowing us to ‘see’ what’s happening when we’re nowhere near what’s happening. This has brought a new value proposition to the fore where the modern paradigm for making money lies in the information. Data is literally money.

The reason digital can transform

There are three things that make digital technology transformational. (1)
Firstly digital signals, unlike their analog brethren, can be transmitted without any loss in fidelity – your Facebook looks the same in Cape Town as it does in Mumbai. Secondly, digital signals can be replicated indefinitely – a billion people can check my page without any degradation (unlike You magazine pass-along readership), and thirdly, incremental costs are virtually zero – once you’ve set up content, the marginal cost of another 1 000 ‘friends’ seeing it is, apart from the time invested, is virtually zero. So here we have a fertile setting for a change in game plan.

General Electric – anything but general

The last thing GE wants to be is a supplier of machinery. The real business lies in a new value proposition away from just the reliable machine to selling better performance and lower maintenance costs. In a nutshell – more value. The veritable gold is the data that the machines actually provide. And with the proliferation of digital sensors and ‘the internet of things’, it is no stretch of the imagination to appreciate how the data of distant performance can reach your digital device.

GE is now adding digital sensors to its machines which allows for constant monitoring of usage and performance. In jet engines that means the company can now offer less downtime (you know exactly when it needs attention) which results in more miles flown which results in more money for the airline. Although not unique in this endeavour (many modern jet engines are monitored remotely today), they did make $800 million from their value-add strategy in 2013, and expect it to go over the billion dollar mark for 2014/15. (1)

This remote recording function was recently in the news with the report that the missing Malaysian Airline flight 370 was transmitting engine data to Rolls Royce after it disappeared from radar. Although this is an interesting development that adds to the mystery, it appears to be unfounded. (2)

Google builds a nest

Taking the above into consideration, one can understand why Google shelled out $3.2 billion for Nest – a supplier of thermostats and smoke detectors. The catch is the data and its connectivity. The thermostats don’t just turn on and off, but actually learn over time what you prefer and what’s good for the environment through a combination of sensors, algorithms and cloud computing. It even displays a leaf icon as a reward when you’ve set the temperature to a more energy-efficient setting. Not to mention the fact that it connects to your Wi-Fi, giving you control anywhere at any time. (3)

You could virtually take the temperature of a neighbourhood to build an aggregate picture of what’s happening in terms of energy (and smoke). However Nest makes no secret of the fact that it’s not about thermostats and smoke detectors, but to take all the technologies we have in our homes and make them smarter and more valuable. They call it the conscious home.

Google has been great at knowing what we do when we’ve got a screen in front of us. It knows our online behaviour and now with Nest it closes the loop: it will know what we do when we’re away from the computer. Although the information is private and can’t be shared with Google, even anonymous data will give Google a leg up to gain insight into what we do in our physical world – and they will no doubt figure out a way to leverage the data so it can get back its $3.2 billion investment – and then some.

Embracing ubiquity

A business model is essentially defined by two things: how you create value and how you capture that value. Digital changes things slightly. When GE partnered with the energy giant E.ON, the classic role would be for GE to supply more turbines, allowing E.ON to produce more energy. However that’s not what transpired. GE ran the data and found that, instead of adding more turbines, if you connected all the turbines through software and devices (that GE supplied), you could get dynamic control which could meet the required demand. So from becoming a seller of equipment and servicing them, they migrated to using data to provide for better decisions to leverage greater value. (1)

In previous years it was all about ‘having’. Today it’s all about ‘knowing’. So if knowledge was power before, it has certainly become profit today.


  1. Marco Iansiti, Karim R. Lakhani. Digital Ubiquity: How Connections, Sensors and Data are Revolutionizing Business. Harvard Business Review, November 2014. https://hbr.org/2014/11/digital-ubiquity-how-connections-sensors-and-data-are-revolutionizing-business/ar/1
  2. UPDATE 1-Rolls-Royce concurs with Malaysia on missing jet’s engine data. Reuters, 14 March 2014. http://www.reuters.com/article/2014/03/14/malaysia-airlines-rolls-royce-hldg-idUSL6N0MB1IE20140314
  3. Marcus Wohlsen. What Google Really Gets Out of Buying Nest for $3.2 billion. Wired, 14 January 2014. http://www.wired.com/2014/01/googles-3-billion-nest-buy-finally-make-internet-things-real-us/


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The 10 reasons why strategy implementation fails.

When it comes to strategic planning, the humourist Sam Levenson makes a keen observation: “Some people are so good at learning the tricks of the trade, that they never get to learn the trade.” The result is that we have a document that is so generic – full of platitudes and fancy words (the tricks of the trade) – that we land up with something no one can really relate to. And if we can’t relate to something, we seldom become involved.

Here are nine more reasons why strategy implementation never pans out as intended:

  1. The map does not closely resemble the territory.
    Just like a map, a strategy can show us where we are, where we need to be and the way to get there. But if it does not accurately reflect what is on the ground (i.e. the territory) it is just a piece of paper (or useless GPS device). Obstacles then arise ‘out of nowhere’ and the strategy becomes a lame duck.
  1. The strategy is told not sold.
    Although strategic direction is set by senior management, the implementation depends on the buy-in of everyone. Even if the strategy is clear, that does not mean everyone has bought into the ‘spirit’ of the plan. This often creates a baffling situation of why people aren’t ‘doing the right thing’.
  1. The structure does not exist. Neither does the system.
    It’s all very well having a focused strategy that is clear, but if the resources are not aligned, then the whole process is pretty much academic. Putting in the required structure and systems also makes the process tangible – and sends out a serious message: the strategy will be implemented.
  1. Time periods are unrealistic.
    Strangely enough, time is actually not a linear commodity – if we do one thing on Monday, it does not mean we will have done 5 things by Friday. The situation, and our personal motivation, is not a constant. Shorter time frames tend to deliver exponentially less, or as Bill Gates explains: “Most people overestimate what they can do in a year and underestimate what they can do in ten years.”
  1. Deliberate vs emergent.
    Many industry sectors have learnt that ‘business as usual’ is a dangerous concept. Once we have completed the strategic plan, we have constructed what could be defined as a deliberate strategy: we expect action A to produce result B. However, effective strategies can also emerge from what we do in response to what we experience in real time.
  1. The gaps are too large.
    The people on the ground who need to implement the strategy, and who might not have been involved in the strategic planning process, find it difficult to see the plan in perspective. Instead of evolving, it just appears. The strategy does not take into account departmental or individual objectives, so there is too far a stretch between what the strategy dictates and what is being done on a daily basis. These day to day activities might not be documented, but they are firmly entrenched in daily practice.
  1. Things are expected to stay the same.
    When a strategy is constructed, certain assumptions need to be made. These are akin to predictions and, as we are as yet unable to tell the future, the best laid plans can, and often do, go awry. A strategic plan is an iterative process that needs to take into account that the environment is a dynamic one – targets are always moving.
  2. There is no monitoring.
    Once the plan has been formulated we often see that as the end of a process as opposed to what it really is: the start. Regular management meetings are dictated by the order of the day as opposed to the plan for the year. Operational issues are often seen as more important, relegating strategy to an infrequent discussion ‘when time allows’.
  1. It does not engage.
    The style of communication is not relevant to the implementers leaving them to wonder what it’s all about. This is a barrier to action. People must know what they need to stop doing, start doing or do differently. A strategy demands a change in habits – merely knowing is very different from knowing what you actually have to do. And habits are hard to break.

 Strategies need to be inspiring. There is a cost in terms of time and energy for anyone who needs to implement it. Sometimes we just have to dream a little, ignoring ‘what is’ at the expense of ‘what could be’. As Sam Levenson wisely says: “One of the virtues of being very young is that you don’t let the facts get in the way of your imagination.”

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The digital meme generation

The term ‘meme’ was popularised by Richard Dawkins in his book The Selfish Gene. The reason that our genes are selfish essentially boils down to survival of the fittest – your genes are selfish, because they want to replicate themselves. That’s why ‘a chip off the old block’ sounds so comforting.  If genes mutate, then your offspring might be weaker in some way. So the strong survive. Hence the term ‘good genes’.

 Anything that spreads is a meme

 For our purposes, a meme is any cultural product that spreads. The miniskirt was a meme. So are jokes and social interaction. And most notable of all – viral videos. Anything that spreads through a community or culture is essentially a meme (diseases excepted in our case).

 Memes are important in social media, because the greater the advantage of the receiver passing on your message, the greater your reach and the lower your CPM (in money and/or time). There must be some value in the meme to the person passing it on. It could be something to make others laugh, a great retail deal, a valuable article or an interesting course. Or the favourite meme: gossip.

 So, although it is somewhat challenging to produce a viral meme, it provides an exceptional return. Viral memes seldom occur through hard work – they just happen once in a while through natural selection.

 Going back in time

 One of the first viral memes that I recall appeared in 1995 with the dancing baby which you can see here. It fascinated us at the time. I wanted to dress up an adult in a baby costume who would then do this dance for an ad (I can’t remember the brand I proposed it for), but I got some strange looks around the table, so I let it go. Still think it would have made a great ad though.

 There are many other memes with unusual names and I don’t know if you’d be able to pick up the Concise Oxford Dictionary in the next few years (assuming the print version will still exist), which will have to describe every meme’s name.

 Internet memes come from the strangest places and have some of the most wonderful names, such as lolcats. These are pictures of cats with a funny caption (lolspeak). For example it could be a cat biting a computer mouse with the caption ‘I has mouse’

 Great ads that offer amazing stories are very powerful meme’s too. The Dove beauty patch being one of my favourites.

 An invisible horse and clumsy dance moves

 I’m not sure why, but Gangnam Style spread like wildfire on Youtube. I mean, it was just a bunch of people dancing – who would have predicted it would become the most-liked video in YouTube history going on to win the MTV Video of the Year?

 Released by South Korean rapper, Psy, in July of 2012, this video inspires a dance style involving an invisible horse and clumsy dance moves which you’ve probably seen. The ‘Gangnam Style’ itself is a parody of people’s perceptions of the upscale Gangnam District in the city of Seoul, where the residents are known to be wealthy and trendy.

 The lyrics aren’t that bad either, for example:

 A girl who looks quiet but plays when she plays
A girl who puts her hair down when the right time comes
A girl who covers herself but is more sexy than a girl who bares it all
A sensible girl like that

 I’m a guy
A guy who seems calm but plays when he plays
A guy who goes completely crazy when the right time comes
A guy who has bulging ideas rather than muscles
That kind of guy

Beautiful, loveable
Yes you, hey, yes you, hey
Beautiful, loveable
Yes you, hey, yes you, hey
Now let’s go until the end

The brain drain

This excerpt from an article by Michael Harris in WIRED, explains the predicament of our younger generation (or perhaps it’s a distinct advantage?):

Recently, my two-year-old nephew Benjamin came across a copy of Vanity Fair abandoned on the floor. His eyes scanned the glossy cover, which shone less fiercely than the iPad he is used to but had a faint lustre of its own. I watched his pudgy thumb and index finger pinch together and spread apart on Bradley Cooper’s smiling mug. At last, Benjamin looked over at me, flummoxed and frustrated, as though to say, “This thing’s broken.”

MRI studies actually show that if you take people who have never been online before, and expose them to the internet, even for just a few hours – different parts of the brain light up afterwards. Although we still have approximately the same size lump of grey matter, going online matters to the brain – new neural circuits are formed to deal with the way information is presented, and how you interact with it.

Unlike folk tales that have been passed from generation to generation, memes are mostly 100% accurate. The meme I receive is the meme I pass on, in the same way that the genes I have are the genes I pass on. Fidelity is 100%. The problem then becomes a little clearer – the internet generation don’t have to think deeply about things. Only the first generation who have created the meme have done much thinking. The rest of us just pass it on as easily as a flick of the finger. But with so much information readily on hand, perhaps that’s even an evolutionary advantage: not getting too involved – there’s just too much information.

So there’s a stronger link between genetics and social media than we think: only the strong survive.

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The world’s funniest joke - its implications for brands.

The “world’s funniest joke” was exhaustively researched by Professor Richard Wiseman of the University of Hertfordshire. The reason for the research was to discover the joke that had the widest appeal amongst different cultures, demographics and countries. The project to find this joke was called the LaughLab, and encompassed 40 000 jokes and 1.5 million ratings. (1)

 Here’s the joke:

 Two hunters are out in the woods when one of them collapses. He doesn’t seem to be breathing and his eyes are glazed. The other guy whips out his phone and calls the emergency services. He gasps, “My friend is dead! What can I do?” The operator says “Calm down. I can help. First, let’s make sure he’s dead.” There is a silence, then a gunshot is heard. Back on the phone, the guy says “OK, now what?”

 Why funny is funny

 Many of the other jokes (I’ll share then with you in a moment) received higher ratings, but the one above had the most universal appeal.

 We find jokes funny for primarily three reasons

1. They can make us feel superior to others
2. They can reduce the fear of anxiety-provoking events
3. They can surprise us because of some kind of incongruity.

The hunters joke contains all three – we feel superior to the stupid hunter, realise the incongruity of him misunderstanding the operator and the joke helps us to laugh about our concerns about our own mortality. (2)

 The LaughLab found major differences in “funniness” between different countries and hence cultures. For example, people in the UK and Australia liked word plays such as:

Patient: “Doctor, I’ve got a strawberry stuck up my bum.”
Doctor: “I’ve got some cream for that.

 People from France, Denmark and Belgium, liked jokes that were somewhat surreal (I love this one too):

 An Alsatian went to a telegram office, took out a blank form and wrote:
“Woof. Woof. Woof. Woof. Woof. Woof. Woof. Woof. Woof.”
The clerk examined the paper and politely told the dog: “There are only nine words here. You could send another ‘Woof’ for the same price.”
“But,” the dog replied, “that would make no sense at all.”

When you have to be joking in advertising

There is a plethora of research conducted on humour and its use in advertising, but lest we forget: advertising is neither science nor art – advertising is persuasion. People still speak of music as the universal language, yet there is a large divide between cultures  – the halftones of Eastern music still feels somewhat eerie to the Western ear. We are not all the same when it comes to music and we are not all the same when it comes to humour.

There is humour in a relatively large proportion of advertising. Obviously, if its use is inappropriate, it detracts from the message and does not reinforce the intended communication. But with so many messages bombarding us every day, advertisers have to resort to some emotional tug just to get your attention.

The downside of humour is that funny ads are seen as less credible and not always relevant. (3)

The upside is that that humour (in the form of a one-line joke) can promote message comprehension. (4) However, you may perhaps have forgotten the brand that made the word ‘seerius’ part of our vocabulary (making that theory null and void). It was however a beautiful blend of using specific local culture to appeal to the masses. The campaign was for Polka (they were bought by MWeb, but the brand seems to have been discarded somewhere along the line).

The last dictator eats chicken

The Nando’s  ‘Last Dictator Standing’ advert was flighted in 2011, and featured an actor portraying Robert Mugabe; depicting the Zimbabwean president fondly reminiscing over time spent with other recently fallen dictators such as Muammar Gaddafi.

The advert caused a bit of a furore amongst some Zimbabweans who called for the campaign to be stopped. When South Africans were asked if Zimbabweans were justified in being upset, 68% of people said no. (5)
Even if we are neighbours. we just don’t see things the same.

Henry Bowman, an anthropologist, concludes that humour is “a more or less elemental human reaction, and that the fundamental elements of humorous situations remain the same across cultures.” He determined that the content of humorous situations, however, varies from culture to culture. (6)

I think the best jokes make you think for a second:

Two fish in a tank.
One turns to the other and says: “Do you know how to drive this?”


1. http://en.wikipedia.org/wiki/World’s_funniest_joke
2. http://www.richardwiseman.com/LaughLab/winner.html
3. Does humour make ads more effective? Millward Brown https://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&sqi=2&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.millwardbrown.com%2Fdocs%2Fdefault-source%2Finsight-documents%2Fknowledge-points%2FMillwardBrown_KnowledgePoint_HumourInAdvertising.pdf&ei=cj8UVKnuC8Lm7Aa1-ICwBQ&usg=AFQjCNHq75A-9M42ZeOkiZIm_w0bAK89ZA&sig2=K_mw6EDA1d-FGc1X0tmt7A
4. Calvin P. Duncan, James E. Nelson, Nancy T. Frontczak. The effect of Humour on advertising comprehension. Advances in consumer research. Vol 11, 1984
5. Paul Harrison. The South African. http://www.thesouthafrican.com/nandos-ad-survey-shows-youth-have-sense-of-humour
6. H J Crawford. Investigating the effects of humour in cross-cultural advertising. http://www.anzmac.org/conference_archive/2007/papers/HCrawford_1.pdf

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How big data can tell if you're pregnant

A young man called Andrew Pole loved data, especially the patterns that would emerge. Some of his research was questionable, such as working out the optimal amount of beer that you would drink to have the confidence to chat up a woman, but not so much that you made a fool of yourself. The experiment was a failure. 

Pole joined Target in 2002 as a number cruncher. Customers in the more than 1 000 stores handed out terabytes of data via their store cards, credit cards, coupons and other channels. He was in data heaven. More of him and his successful pregnancy detection later. (1)

It all started in outer space

The first documented use of the term ‘big data’ appeared in a 1997 paper by scientists at NASA, who described the problem they had with computer graphics:  “Provides an interesting challenge for computer systems…” (2)

In 2001, analyst Doug Laney described the “3Vs”—volume, variety, and velocity—as the key “data management challenges” for enterprises. The amount of data, since the advent of the computer, has exploded in all three areas.

I’m an analog person. I like things I can touch and count. However big data has been thrust upon us, and the statistics of yesterday is the abacus of today. There are numerous definitions of the term ‘big data’, which I have summarised as follows: it is a collection of data from all sources giving us a plethora of data so diverse that traditional statistical techniques are as useless as my knowledge of particle physics, especially Feynman’s string theory.

Data gets big

Unlike the big bang, there is no moment in time that we can identify when big data became a commercial phenomenon. Perhaps it was when store accounts could be opened (involving paper and the post), however credit cards increased knowledge of our spending habits exponentially. Add store cards, web behaviour, social network interactions mailings sent, surveys filled out, phoning the customer help line, opening an email or visits to the website (with all its measures), purchases made online etc etc, and you get data sets that are really big with data that can’t all be measured in the same units. Apples and pears.   

Andrew Pole detects who’s up the pole

One day someone from the marketing department asked Pole if he could figure out which of Target’s customers were pregnant based on their buying patterns. The reason is that pregnant women and new parents are the holy grail of a department store like Target. They are veritable gold for retailers, because they’re so sleep deprived. If they buy nappies or formula at a Target, they’ll buy just about everything else they need. Anything just to get a few more hours’ sleep.

Target already had a baby registry, so shopping patterns of pregnant/new mothers could be analysed. Extrapolate that out to the population and you get a list of thousands of women who were likely to be pregnant. So Target did what a retailer does – they mailed them everything they would need for a new baby. This went on for about a year and then the glitch came in the form of an angry parent with a mailer in his hand demanding to see the manager.

“My daughter got this in the mail. She’s still in high school, and you’re sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?”

The manager apologised profusely, and just to make sure the customer had been placated, he called him the next day. This time it was the father who apologised – he had a talk with his daughter and she was due in August. That’s big data for you.



1. Gil Pres. 12 Big Data Definitions: What’s Yours? Forbes 09/03/2014. http://www.forbes.com/sites/gilpress/2014/09/03/12-big-data-definitions-whats-yours/

2. Charles Duhigg. The power of habit. Random House Books, 2013.


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The most amazing pitch in history

There are only two ways to organically grow your business. The first is to sell more to existing clients; the second is to get more new clients. And they key to this organic growth is pitching.

I’d like to share a remarkable pitch story that happened way back in 1970 when the British Rail advertising account was up for grabs. An agency called ABM was short-listed and allowed to present to the railway executives. There are a number of versions of this story. I particularly like this one.

British derailed

The big day came and the management of British Rail arrived at the appointed time, only to be met with a deserted reception room that was filthy.

They checked their watches and diaries – no, they were there at the right time.

Now, to make matters worse, when the receptionist did arrive, she treated them with some disdain. Actually she ignored them totally. The chairman of British Rail made his presence known by coughing a few times – but that didn’t work. He then tried the direct approach: he said “Excuse me, we’re here to see….”

The receptionist said “Be with you in a minute love.”

“But we have an appointment….”

“Can’t you see I’m busy love?”

 “This is outrageous. We’ve been waiting fifteen minutes.”

“Can’t help that love.”

 “Right that’s it, we’re leaving.” And as the management of British Rail started to depart, a door opened and out stepped the head of ABM who said “Gentlemen, now can you see what it’s like for your clients.”

The presentation that followed simply showed how bright the future would be if ABM was chosen, but I think you’d agree with me, irrespective of what was in the presentation, they were already on a winning foot before they started. And win the account they did indeed. 

It’s not about information

The trap that so many people fall into is that they think the key to persuasion is to present information, and then that information should convince the other party.

So we present our credentials, examples of the work we do, our impressive list of clients and our experienced team – and we expect that to do the job.

Well, if you’re doing that, you’re in the wrong place. As Donald Galne the neurologist reminds us: reason leads to conclusions, while emotion leads to action. Presenting the facts means that you’re in the library of the mind. Where we want to be is in the theatre of the heart – that’s where yes or no decisions get made – the theatre of the heart. Pitching is not about widening people’s knowledge base – it’s about upping the voltage of their emotional electricity. We don’t want conclusions, we want action.

This is one of the few times you can get it wrong

I have sat in pitches where the company presenting got it wrong – what they suggested would clearly not work for the client. But the client hired them! And when I asked why they had made that choice, when clearly other companies pitching for the account were more accurate, the answer was simply “they’re the people I’d like to work with”. Surely that decision – and many more like that – were made, not purely on the facts, but on how people felt. We tend to feel something for people we are prepared to make a commitment to – whether it’s to buy their product or to marry them. There are facts and cues that do matter depending on the situation, but the final decision will be based on feelings of trust, confidence, hope, ambition and desire. Feelings.

So it’s important that you understand this simple fact: you don’t get employed because you get it right in the pitch – they employ you because you could get it right.

Clients aren’t looking for great work; they’re looking for great people.


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Ten things a good map can teach you about strategy.

There are copious definitions of strategy from numerous pundits in the field – some definitions reminiscent of everything and the kitchen sink. Strategy, although having its roots in ancient warfare, is a relatively new (I nearly said science), where it has progressed over the years, following one of two paths: simplification or complication. Kenneth Andrews, was an American academic who, along with Igor Ansoff (of Ansoff Matrix fame) and Alfred D. Chandler, are credited with founding the concept of modern business strategy.

One would expect Andrew’s definition to be somewhat broad, as this was a new field. And it is. However I have seen its unfortunate use by some universities today where it is used as the standard definition of strategy. It is not – it is the first definition to emerge in a new field, and to give you some idea of the origins of business strategy, let me share his definition with you, but please don’t try and remember the details:

The pattern of decisions in a company that determines and reveals its objectives, purposes or goals, produces the principal policies and plans for achieving these goals, and defines the range of business the company is to pursue, the kind of economic and human organisation it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers and communities.

This was in the 1950’s. In the 60’s Alfred Chandler gives us a more concise definition:

Strategy is the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Fast forward to the 1980’s and we start seeing more focused definitions, such as Michael Porter’s:

Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.

However, Porter’s definition supports his perspective that strategy is a competitive endeavour. And today we see many more strategists with precise definitions, but ones that usually support their central hypothesis (and their books).

You must remember that Andrew’s definition was proposed at a time when nothing substantial existed in the field, but I think strategy has progressed to the point where we can say it is merely a way to move from A to B. Or perhaps I have just taken the liberty to say so. I apologise to strategists for this somewhat reductionist approach – I admit strategy can be somewhat more complicated. However, this simple maxim allows us to take the elements of a good map and align that to a good strategy, which I believe does have some merit.

Here are ten comparisons:

1. A good map should be easy to read.

2. It should just show relevant landmarks to orientate yourself (not a whole bunch of unnecessary data).

3. It should be the ideal size – not zoom out too much or show too little.

4. It is not the territory itself – things can change on the ground.

5. There needs to be continuity – having to turn the page (or scroll across) on a map at a crucial juncture makes it more difficult to follow.

6. The map is not the journey itself.

7. It needs to be relevant – a map of Cape Town when you’re in Johannesburg might be pleasing to look at, but has no bearing on the actual situation.

8. It is objective – shows things as they are as opposed to how you’d like them to be

9. It points out any dangers along the route.

10. It is the basis for action.


There are numerous templates for strategy on the net. Choose one that looks like a good map to get you to your destination.


Sid Peimer is the resident strategist at www.stratplanning.com, a freelance agency for strategic planning training and consulting. 

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20 ways to chat up a client in a new business pitch

“They couldn’t hit an elephant at this dist …” were the last words of General John Sedgewick as he unwisely raised his head over the parapet during the US Civil War. I think we could all concur that he got it wrong. When we accept the challenge of a new pitch, we stand the chance of getting it wrong. But it’s not the getting it right or wrong that’s important, it’s the getting it. So here’s 20 ways not to get your head shot off.

[Sid Peimer is author of The Clear Win: pitching for new business – the strategies that work; the myths that don’t available on Amazon here]

  1. It’s a GAME. There is no way any rational human being can make a qualified decision in one hour whether you are the right person to work with or not. Our divorce rate is 50% – and that after an extended courtship. So don’t ever think a pitch is anything other than a game.
  2. This is still my personal favourite – start working for the client before the pitch. When you walk in the door on pitch day, you should already have a working relationship. It’s easy – just start working – no one’s going to sue you. 
  3. This is like poker, so you’re allowed to bluff. When you are asked if the presenters are the team that will work on the business say yes. It doesn’t matter if they do or don’t – the client will be lucky if the agency still has the same name in a month. And the time it takes some clients (especially government) to make a decision, half the team would probably have moved on. The half-life in advertising is usually a fraction of the clients’ business, so don’t bother to explain. Just say yes. It’s a game.
  4. The creative work cannot win a pitch, but it plays an important part in stimulating an emotional reaction. That’s handy, because the final decision is an emotional one. Don’t use the creative to show how creative you are – use it to leverage an emotional response. 
  5. When presenting past successes, share the kudos with the client you did the work for. Tell them how fantastic and brilliant and clever that client was. Don’t tell them how brave the client was to get you to do such great work. They will take your attitude of past relationships as an indicator of future relationships.
  6. Understand their business. This does not mean you have to know how to spot-weld a door on a car, but it does mean that you can speak as an insider. “They don’t understand our business” is often the reason the account went to pitch in the first place.
  7. Agencies that pride themselves on communicating well with consumers can be unsympathetic to the audience in the pitch. The consumer target market is important, but of more importance is the target market that the client actually deals with on a personal basis, such as key accounts and field staff. They know their names. Mention them. There’s nothing like saying “Well Barry in KZN felt he needed a greater emphasis on widget number 6, even though there was the O/S for June due to the power failure”.
  8. Present as a team. If you don’t like each other then don’t expect the client to.
  9. Don’t show the fancy proprietary models unless you can show that you practice what you preach. Someone once said there are only three rules to pitching: relevance, relevance and relevance. I’m not sure that’s totally relevant, but always remember to keep the frequency on ‘wii-FM’ – what’s in it for me.
  10. Don’t ever say “I know awards aren’t important, but …”. They aren’t important to the client – if they didn’t think you could do the work they would not have invited you. If you’re going to use a showreel that is emotionally moving, then use it just for that – move them to vote for you, but don’t ask them to cheer your creative brilliance – they don’t care.
  11. There is no such thing as ‘conditional enthusiasm’. You either want the account or you don’t.
  12. Few agencies can demonstrate that they have a real purpose beyond making money. And spare me the pro bono list. Maybe you don’t need a reason to work beyond the kid’s school fees and braces, but please don’t go for mission statement failure, which is a collection of words that no sober person could really salute. Just let the client get to know who you are as people.
  13. Please, please, please don’t waffle on about yourself and show that map of the world with all the dots on it. Rather talk about the client. The client cringes at the words “ … and now a little bit about ourselves”. They are not interested in your world rankings and how the hierarchy works. Don’t waste time on this at the expense of the main event. I won a pitch last week and realised I forgot to talk about us. Oh well, win some lose some.
  14. Don’t assume that the client has intelligence equal to yours. He may have more. If you’re going to go into great detail about the market, find out how much they know first. The 100-slide market appraisal is like pulling teeth.
  15. After several presentations, the client can’t remember who said what. They will remember a strong idea. And here’s the amazing truth; It doesn’t matter if it’s wrong, it just has to make an impression. You are not going to be employed for getting it right, you win because they think you can get it right.
  16. PowerPoint can force you into a linear presentation that then becomes a commitment to ‘get to the end of the deck. The client then enters a countdown to escape. They will hate you for reminding them of boring lectures or even worse – school.
  17. Assume that just answering the brief is something the other agencies will do. Answer the brief accurately, but that does not mean you have to accept some of the benign claims in the brief. On the contrary, if you feel you know enough to disagree with the brief, you’re already adding value.
  18. A presentation is like an ad – a bold proposition that promises a clear benefit. Then give them something definite – what you are going to deliver, when it will be completed and how much it will cost.
  19. People choose to work with people they like. We tend to like people who like us. Like the client. It’s easier to like someone when you’re in control, which depends on you doing three things before the pitch: rehearse, rehearse, rehearse.
  20. Sometimes the best new client is an old one – if you can’t be with the one you love, love the one you’re with. 

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It’s like the Gods Must Be Crazy except the Coke bottle is an actress.

[[Sid Peimer is author of The Clear Win: pitching for new business – the strategies that work; the myths that don’t available on Amazon here]

When writers pitch their screenplay they need to position the movie relative to something the studio executive knows. For example, Argo would be “The Great Escape meets the Ayatolla”. What really goes on in Hollywood pitches was somewhat of an enigma until Kimberly Elsbach of UCLA and Roderick Kramer of Stanford spent five years totally immersed in the process. (1)

Their much lauded study appeared in the Academy of Management Journal where their central finding was that the success of the pitch depended as much on the catcher (the studio exec) as on the pitcher (the writer). (2)

An elaborate ritual, but just 2 processes

Beneath this elaborate ritual, two processes were at play. Firstly the catcher used certain cues to judge the pitcher’s creativity; attributes like passion wit and even quirkiness. Slickness, trying too hard and lots of different ideas were seen as negative cues. If the catcher was more influenced by the negative cues, the meeting could essentially be over in the first few minutes.

However there was a second process occurring at the same time: in most successful pitches, the pitcher didn’t push the idea onto the catcher until a ‘yes’ was extracted. Instead the catcher was invited in as a collaborator. The more they were allowed to collaborate, the greater the chance of the idea being greenlighted. The purpose of the pitch should therefore not be to move others to immediately adopt your idea, but to offer something so compelling that it begins a conversation, allowing both parties to play the ideal role: to be participants.

It’s the same in the simulator

In simulated pitches on my courses (I’ve done about 100), the same issues come up time and again. Although delegates often label this as ‘just an exercise’ (they only have 20 minutes to prepare and 5 minutes to present), having sat on the client side of numerous pitches, I firmly believe that the same issues would have arisen had the pitch process been ‘for real’. As Parkinson’s Law states: A task will be accomplished in the time allocated to it. (3). It has also been said that very little work would come out of an agency if it wasn’t for the last minute. (4) I trust you get my point.

Below is a table that separates the winners from the losers in the simulated pitch environment.




Stuck to the 55/5 rule*

Went straight for objectives

Defined the problem – sometimes
breaking it down to its components.

Regurgitated the brief

Accepted the situation

Saw the timeframe as unrealistic, and that this ‘is just an exercise’ – it would be different in real life. It isn’t.

Played down the puffery

Included irrelevant ‘puffiness’. Took wooing to a level of discomfort.

Brought it back to one thing

No cohesive concept

What they didn’t know, they explained how they would find out, and why they needed to

Showed how much they knew

Had very logical structure

Just information – no story

Were sensitive to the existing business

Proposed dramatic change

Body language supported what
they were saying

Mouth said one thing, their manner said another

Wetted my appetite – gave me a few tactics (just to give me an indication of the application of strategy – not to show how marvellously creative they were)

Either focused on tactics at the expense of strategy, or left out tactics altogether

* The 55/5 rule is Einstein’s maxim: “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”


  1. Daniel H. Pink. To Sell Is Human: The Surprising Truth About Moving Others Riverhead, 2012.
  2. K D Elsbach, R M Kramer. Assessing creativity in Hollywood pitch meetings: Evidence for a dual-process model of creativity judgements. The Academy of Management Journal, Vol 46, No. 3 (June 2003), pp 283-301.
  3. There are a number of variations on Wikipwedia http://en.wikipedia.org/wiki/Parkinson’s_law
  4. Not sure if I read this somewhere or made it up.

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The 5 faux pas of new business pitching

[Sid Peimer is author of The Clear Win: pitching for new business – the strategies that work; the myths that don’t available on Amazon here]

When pitching for new business, for some reason we act differently. We often should change our usual behaviour, because starting a new relationship requires some restraint and a degree of bravado, but that does not cross the line to absurdity. Here are 5 common errors when pitching for new business.

1. Making it all about you. No one is really interested in your vision, mission and values, at least not in the way they are usually described on the inside front page of annual reports. Although people like to know where they stand with you going forward, these sterile strategic statements push people away as opposed to drawing them in. I have sat through so many presentations where the list of values borders on the ridiculous – after course you are an inclusive company with honesty and integrity with the client’s interest paramount. What drivel.

 2. Thinking they’ll remember you for more than one thing when you walk out the room. When Bill Clinton ran for president he realised you always have to bring your message back to the one thing. In his case it was the economy, with the result that pasted in his campaign office was the message “It’s the economy stupid”. So, if healthcare was the issue being discussed, he brought it back to the economy. If security was discussed, he brought it back to the economy. And when the economy was discussed it hit his sweet spot.

 3. Not going all the way. This is somewhat paradoxical to the way you should behave when starting a new relationship. However, the prospective client does not want to hear what you are going to do – they want to see it. So here’s the thing: this is one situation where you don’t have to be right to win. Taking concepts (right or wrong) all the way to execution gives the client insight into how you think, because you don’t get hired for getting it right; you get hired baecause the client fells you could get it right.

4. Having no coherent structure. Not everyone is a great presenter, but you need to tell a story where your strategy emerges naturally. Showing how much homework you’ve done (and supporting the Death by Powerpoint lobby), and then jumping across the chasm to a solution means you have taken the client across a tightrope with no safety net. The most important thing is clarity; a child should be able to follow your logic. Sir Gerry Robinson, the ninth of 10 children who from a modest background and rose to be a captain of industry drives the point home: “There is no such thing as a great presenter; just a clear thinker”.

5. There is no such thing as ‘conditional enthusiasm’. You either want the account or you don’t.

 Sid Peimer is author of The Clear Win: pitching for new business the strategies that work; the myths that don’t available on Amazon available here 

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The 5 faux pas of strategic planning

Strategy is part science (based on fact) and part art (based on ideas). The result is that there is no one right answer. However, there are a number of wrong ones, five common causes are detailed below.

1. Top of the list is the fact that most strategies fail, because the market (people) did not do what we expected it to. We treat every initiative as if the consumer behaves subject to the ‘economic man’ model. People do not think in a reasonable way and very often they can’t even explain their behaviour. There are times when people do behave subject to the normal demand curve – when prices go down, demand goes up. That’s why we have sales. That works fine most of the time, but reducing prices, adding more features etc befuddles us when the market does not respond in the way we expected it to.

2. Not sticking to the 55/5 rule. Although of unknown origin, this quote attributed to Einstein explains it nicely:

“If I had one hour to save the world, I would spend 55 minutes thinking about the problem and 5 minutes thinking about solutions”

We often just take briefs without doing the literal spadework – digging for what the real problem is as opposed to force-fitting our brilliant solutions to a brief that demands superficial outcomes such as increased awareness.

3. Making E3 errors. Simply stated this is solving the wrong problem precisely. Refer to point 2.

4. Searching for the magic silver bullet insight. Sometimes solutions are based on insights (depending on how you define the term), but if you have isolated the problem, brilliant communication can come from something as mundane as a product feature.

5. Blinding yourself with data. I’ve even seen a presentation where the female market was identified as the target market, as they made up a whopping 40% of the total market. Think about that.

If we took all married couples, we’d find that the average person has one testicle and one breast (assuming same sex marriages occur equally for men and women). Data can be dangerous – Steve Jobs went for the iPod simply because everyone listened to music, no one had got it right and the market was growing. He even quoted Henry Ford: “If I asked my customer what they wanted they would have just said a faster horse”.

Strategy is a high risk endeavour, because it entails predicting the future and I have yet to see “Clairvoyant wins lottery”. In addition, as was quoted in The Economist as far back as 1993, and is even more relevant today: “Consultants that compete for giving advice to companies, cannot even agree on the most basic question: what is strategy?”

How can a team come together and provide a solution if they don’t have a similar ‘take’ on what strategy is. We then just have a number of disparate opinions that hopefully moves us forward to a solution.

I never intended this to become sales spiel, but I seem to have migrated to promoting my course, because it is not possible to fix the problem in an article.  ‘Strategy in a Day’ gets everyone on the same page. Details on my homepage here http://www.stratplanning.com/

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How to sell off-the-wall creative

Great ideas come from somewhere. No one really knows where. Although neuroscience identifies parts of the brain that ‘light up’ during creative moments, perhaps great ideas come from the darkest recesses of our minds. Who knows. But that doesn’t really matter if you can’t sell it.

Brief moments

Most of the time we just take a brief and do we what need to – we answer it, usually using the same vernacular we were given, such as brand values, competitor set and consumer insights, the latter usually being some descriptive nonsense required to fill in that block (you don’t seriously still have blocks in your briefs do you?)

When we return with our work, clients will firstly decide whether it meets the brief, and then approve it if they like it. The first thing we need to accept is this: we are not there to answer a brief – we are there to solve a problem! How can you give the client an answer if there is no accompanying problem?

Vital organs

So, how do you sell off-the-wall creative? Just as a rugby ball needs to be well placed before kicking for posts, you need to set up the problem to enable conversion. That simply means phrasing the problem in a certain way .

Say you are asked to prepare a campaign to increase the awareness of organ donation. You could come back with an awareness campaign communicating that you may very well save a life if you register as an organ donor. However, here’s the award-winning campaign by Leo Burnett Tailor Made for the Brazilian Association of Organ Transplantation as described by D&AD (1):

People are not shocked by the burying of organs. But they are by the burying of a luxury car. To change that, we asked a famous and eccentric Brazilian billionaire, Chiquinho Scarpa, to post on his Facebook page that he would bury his Bentley in the yard of his mansion. The impact was huge. People were revolted and the media criticized his decision. An actual burial ceremony followed, with the media broadcasting live to the whole country. After placing the car into the grave, he stopped the burial and the organs donation campaign was revealed – organs donations increased by 31.5% in 1 month.

I have no idea how the agency managed to sell the idea to the client, but this serves as a wonderful example of how it could have been sold – just by reframing the problem: “people are burying their organs, when they should be giving it to us”. That makes the campaign seem so logical in hindsight, and not off-the-wall at all.

In hindsight

Strategists might be appalled at this bit of reverse engineering, but I find it quite acceptable – as long as it focuses on the right problem. Clients will often tell us what they need, when instead they should be focusing on what the actual problem is. How often do we see generalisations like increase awareness/trial/usage etc? That isn’t a problem to be solved – that’s an activity to be undertaken.

Just frame the problem in such a way that your creative work is the answer. It really is that simple.

Reference 1: http://www.dandad.org/awards/professional/2014/integrated-earned-media/23065/bentley-burial/

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Coconut headsets and other management delusions

The difference between an illusion and a delusion is this: when Usain Bolt broke the 100m and 200m world record, it looked as if he was jogging. That’s an illusion. If you think you can beat his time, that’s a delusion. So, if one company does well with usual mantra of being consumer-centric, then all companies that follow that maxim should do well. If we could just do what Richard Branson does, we will succeed. That’s a delusion.

Hullo Halo

In brand marketing, as you probably know, a halo effect is when one perceives positive features of a particular item extending to other products in the portfolio. (1)
If Samsung makes good washing machines, then surely they should make good TV’s and computers?

However, in this article we focus on micro-economics (the study of the firm itself) where the halo effect is described as the tendency to make inferences about specific traits on the basis of a general impression of the firm (this concept is expounded with great elegance by Phil Rosenzweig in his book The Halo Effect, on which this article is based). (2) 

Marketing ‘gurus’

Tom Peters (and to a lesser extent his co-author Bob Waterman) became the superstars of finding the holy grail of what makes a company successful. It was a prescription for success. Do this and here’s what will happen. However since In Search of Excellence hit the bookstores in 1982, the formula that they devised by analysing why successful companies do well, has not held up so well.

Ten years later only 13 of the ‘excellent’ companies outperformed the market, while the remaining 18 didn’t even match the market. Most of the companies weren’t even average, never mind Excellent (2). Halo goodbye.

The hockey stick is a graph of profitability that muddles along very much in a straight line, followed by a period of explosive growth. Hence the shape of the graph and the descriptive term. Jim Collins conducted exhaustive research on companies which showed 15 years of average shareholder returns followed by another 15 years of spectacular returns. A hockey stick. These are objective measures; solid research unaffected by opinion. So far so good. For his book Good to Great he then conducted exhaustive research to find out the ‘formula’ for what made these companies great. However, people tend to describe successful companies in glowing terms, so here’s where the research gets a bit wobbly. Phil Rosenzweig points to the halo effect being ignored in this research:

 “If you start by selecting companies based on outcome and then (my emphasis) gather data by conducting retrospective interviews and collecting articles from the business press, you’re not likely to discover what led some companies to become Great. You’ll mainly catch the glow from the Halo Effect.” 

 All the great companies were focused. So Collins’s formula instructs you to be focused. However, maybe the returns were higher for the ‘focused’ companies, which could also mean there was higher risk and that the possibility of failure was also higher? Maybe it does pay to diversify – perhaps it is less risky and would give you greater returns than if you had just stuck to your knitting. Virgin for example.

 The ‘science’ of marketing

 The study of business is not a pure science such as physics. If one beaker of water boils at 100 degrees Celsius, then 100 others will do so as well (at the same altitude). In business, this is not the case (although the regularity of waiting for the kettle to boil during tea breaks probably does affect profitability).

The physicist Richard Feynman had a slightly different take on this halo effect, and came up with the phrase Cargo Cult Science (3). This is the way he describes it:

               “In the South Seas there is a cargo cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to imitate things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas–he’s the controller–and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land.”

So if you thinking of keeping up with the Jones’s or the Wal-Marts of this world by doing what they’re doing, think again. Formulas in business, unlike science, aren’t formulas at all – they’re stories.


1. http://en.wikipedia.org/wiki/Halo_effect
2. Phil Rosenzweig. The Halo Effect…and the Eight Other Business Delusions That Deceive Managers. Free Press, a division of Simon and Schuster, 2009.
3. Richard Feynman, Ralph Leighton (contributor), Edward Hutchings (editor). Surely You’re Joking, Mr. Feynman!: Adventures of a Curious Character. W W Norton, 1985.

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The 6 reasons why work gets rejected

You get the brief – you do the work – you show the work and you either get a yay or a nay. Your work is probably of a high standard, so when it gets rejected you feel the pain acutely. However, if you know the secret sauce, the frequency of rejections should decrease markedly and so should the term ‘Oh well, back to the drawing board’. I can just sense that sinking feeling as you drive back to work.

Don’t take it

Here’s the problem: you’re taking briefs. They should never be taken; briefs are there to be discovered. You are not there to answer the client’s brief – you are there to solve the client’s problem. There’s a big difference. Things like “We’re going into print,” should be a red flag. That does not allow you to get to grips with the problem. We often ask ourselves what do we need to do to sell the product, when sometimes it’s better to ask why people don’t buy (more) of the product. Surely if you provide an answer, there must be a question?

That’s why work gets rejected so often – it does not answer a question. There is no problem, so the ‘solution’ is either liked or disliked by the client – whatever takes their intuitive fancy. Granted, the more seasoned the client, the more accurate their intuition, but you’re now depending on the client for the right solution.

Heed this

Here are six warning signs that the work is going to come back:

1. You are determined to find a magic bullet insight that will result in breakthrough communication. The reality is that good advertising does not depend on an insight – it depends on persuasive communication. Advertising is neither art nor science; it is persuasion.

2. You use terms like LSM 8 – 10. That’s like saying people are made up of 80% water. There are other demographics that can be read on your database. We have computers – use them.

3. You include copious amounts of information. That’s all very well, but as the saying goes “I wrote you a long letter, because I never had time to write you a short one”.

4. There’s just no cohesive theme – it’s exactly what the client said plus a whole lot of background information which shows how much work you’ve done. A good brief is like a good map – it points out only the things you need to orientate yourself.

5. There is no problem to be solved. You just wax lyrical about the brand and dammit everyone should know how great it is, and if they did they would buy it.

6. There are already media suggestions in the brief. That’s OK – it’s nice to be called in to do a TV ad. But you’re there to provide value and who knows, if you really get to grips with the problem you could sell the client on additional value adds? Margins are tight enough as it is, and when you suggest something proactive you’re the one who now dictates price. And that’s a nice position to be in – for a change.

A brand new day

When last did you have a Brand Day with your client? I’m not talking about a review (which is non-billable); I’m talking about putting together an insightful and fun programme to get everyone aligned with the brand. People issues are often the bane of your client’s life, and with a dash of creativity you can help ease the burden. And it doesn’t come out the marketing budget either – it’s training.

Sid Peimer is a freelance strategist resident at www.stratplanning.com. Besides Comstrats overnight, he can also facilitate exciting Brand Days.


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The 7 traps in decision making, and how to avoid them.

The seven traps in decision making, and how to avoid them.

We get through the day with heuristics. These rules of thumb serve us reasonably well, allowing us to make decisions quickly, so that we can efficiently carry out the tasks that are demanded of us. But heuristics can be highly fallible. For example, we judge distance by how clear objects are – on a hazy day we judge objects to be further. Most of us are not flying an airplane, so this error seldom has a fatal result, therefore our misjudgements often do not get the serious attention they deserve (for insights into how pilots gauge distance, see footnote below).

There are seven cognitive traps identified by Hammond, Keeney and Raiffa in their article ‘The Hidden Traps in Decision Making’. (1)

1. Anchoring.

When considering a decision, we give a disproportionate weight to the first information we receive. If we asked two groups the following questions, those that were asked the second set gave a larger estimate.

Is the population of Turkey greater than 35 million?

What’s your estimate of Turkey’s population?


Is the population of Turkey greater than 150 million?

What’s your estimate of Turkey’s population?

This might be a simple and predictable example, but the effect of anchors in decision making has been shown in numerous experiments to affect not only managers, but accountants, engineers, bankers (believe it or not), lawyers and stock analysts.

To mitigate the effect of anchoring, it would be prudent to view a problem from different perspectives – alternative starting points. Essentially be open-minded.

2. The status quo trap

Choosing the status quo saves energy. Research shows that people are more likely to choose the status quo when two alternatives are presented as opposed to one. The perceived mental energy that needs to be expended becomes high, so we take a shortcut.

To lessen the pull to default to what is, always remind yourself of the objective, and ask yourself whether you would choose the status quo alternative, if in fact it was not the status quo.

3. Sunk cost trap

We tend to make choices that justify our past decisions, even if those past decisions no longer seem valid.

This bias shows up regularly in banking when a borrower’s business runs into trouble. In this case the initial lender will tend to advance funds more readily in the hope of reaffirming that the original decision was the right one. Banks have wised up to this and have introduced a policy that the loan be reassigned to another banker when problems arise – someone for whom the original decision is not worth ‘saving’.

As Warrren Buffett says: “When you find yourself in a hole, the best thing you can do is stop digging.”

4. Confirming evidence trap

This cognitive bias encourages us to seek out information that supports our existing point of view, while avoiding information that contradicts it. There are two psychological forces that have an impact here. The first is our tendency to decide immediately what we want to do before we have really worked out why we want to do it. The second is that we become more engaged with things we like than things we dislike.

To address this trap, someone who plays the role of the devil’s advocate is appropriate to build up counterarguments. But an even better prescription would be for you to be honest about your motives.

5. Framing trap

The way a problem is presented can profoundly affect the choice you make. In a classic experiment by Daniel Kahneman and Amos Tversky, the following was proposed:

Three barges have sunk. Each barge holds $200 000 worth of cargo. These are your salvage options – which would you choose?

Plan A: Saving the cargo of one of the three barges, worth $200 000

Plan B: Have a one-third probability of saving the cargo on all three barges worth $600 00, but with a two-thirds probability of saving nothing.

Over 70% chose the ‘less risky’ option of Plan A, even though both have the same potential outcome. The questions were just framed differently.

To counteract the framing trap, don’t automatically accept the initial framing – always try to reframe the problem in different ways. This is crucially important for strategy, because the first step is always defining the problem correctly.

6. The estimating and forecasting traps

I have yet to see the headline “Clairvoyant wins lottery”. Predicting the future is fiction. Other than weather forecasters and bookmakers we generally don’t use a great deal of data which we carefully track over a long period of time. We are however good at making accurate estimates about time, distance, weight and volume, because we’re constantly making judgements about these and getting immediate feedback, so our minds become finely calibrated.

Forecasting sales is a difficult process at best. One of the Big Three automakers felt this most keenly. The planning department responsible for the final forecast asked each of the other departments for their forecasts using key variables such as dealer demand, competitor actions and costs. The problem was that each department gave a high forecast in favour of building more cars ‘just to be safe’. So the planners had a collection of estimates – all which played safe. It took six months to sell off the surplus resorting to substantial discounts. Garbage in, garbage out.

7. The recallability trap

When estimating forecasts it should come as no surprise that we base our predictions about future events largely on our memory of past events. The problem is that we are overly-influenced by events that are more dramatic. For example we exaggerate the probability of events such as plane crashes and shark attacks, because they get a disproportionate amount of attention in the media.

To reduce the effects of the recallability trap, the idea is to consider the extremes of the situation – the low and high ends of the possible range of values, and then challenge your estimates of the extremes.

To minimise the distortions due to recallability, it’s best not to be guided by impressions, but the actual stats. As I’ve always said: “In G_d we trust. Everyone else bring data”.


Footnote (2)

Pilot strategy to estimate distance:

“I found that initially by plotting my track and then noting prominent features that I would be able to see off to either side – hills, roads, railway, grain silos, power-lines etc – and then measuring them off on the map, I pretty soon acquired a knack for estimating distances to objects and features reasonably accurately. I also found that by checking at how quickly I was passing a feature, and knowing my groundspeed, I could also use that to help estimate distance; naturally the faster the passing relative to the groundspeed, the closer it was. I suppose the basic rule is: get used to the sizes of common, stationary and how they look from measured distances and consciously plant the size in your mind. From there on it becomes relatively easy to judge distances reasonably accurately. Well, accurately enough not to fly into the things. There’s also simply stepping off your fingers over your map track for a reasonable estimation.”


1: John S Hammond, Ralph L Keeney and Howard Raiffa. The Hidden Traps in Decision Making. On Making Smart Decisions. HBR’s 10 Must Reads. Harvard Business Review Press, 2013.
2. Rod Baker. Ex-Military Pilot. Personal correspondence, June 2014.


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Do or die: the advantage of moving first

In the early days of the automobile industry, engineers agreed that the steam engine was far more efficient than the petrol engine. But in popular races the steam engine produced so much power, that the cars literally fell apart. People then inferred – incorrectly – that petrol engines were better simply because the cars broke down less often. This is just one example where being early beats being better.

First mover advantage

Heinrich Greve and Marc-David Seidel studied the role of first-mover advantage and discovered some more shocking evidence – this time in the field of aviation. (1)
In the early 1970’s, two similar passenger planes were in development: The McDonnell Douglas DC-10 and the Lockheed L-1011 Tristar. They were both scheduled to be released in 1971, however the Tristar’s engine manufacturer, Rolls Royce was placed in receivership, delaying the delivery of the engines and hence the plane.

The outcome was that the DC-10 was launched a full year ahead of the Tristar.

A fatal flaw

There was just one problem with the DC-10 – actually there were a few, such as the cargo door separating in mid-flight. The flaws were deadly, resulting in two fatal crashes – one in 1974 and another in 1979. However by 1990 McDonnell Douglas had sold 441 DC-10’s versus Lockheed’s Tristar which only sold 242 planes, even though the latter suffered no fatal accidents in the period. If we take fatalities into account, the DC-10 was a vastly inferior plane, but the yearlong start it received overshadowed sales of the Tristar irrespective of the incidents.

If we compare the technical specs, there’s nothing much between them – granted the DC-10 could carry more passengers (but we don’t know what that did to fuel consumption – there’s no free ride).

Lockheed L-1011 TriStar 500


McDonnell-Douglas DC-10-30

50.00 m


55.50 m

50.09 m


50.40 m

329.00 m2

wing area

367.70 m2

16.87 m


17.70 m




222 kN

thrust per engine

240 kN

666 kN

total thrust

720 kN

231,300 kgs


263,085 kgs

11,260 km


7,415 km


cruise speed


230 passengers


250 passengers

Adapted from www.aviatorjoe.net

Early events matter a lot

Greve and Seidel come to the conclusion that early events matter a lot. “Early advantages like being first to market are amplified over time. Early adoption can set off a chain reaction that gives inferior technologies a competitive advantage.”

Take the QWERTY keyboard for instance. There are a number of explanations regarding its inception. The first is that it slowed down our rate of typing so that the mechanical keys did not overlap and get stuck; the second being the fact that the word ‘typewriter’ could be typed out by the salesperson by just using the top line of keys (try it and see). There are so many better configurations for typing, but QWERTY got in first so QWERTY it is.

Whether it comes to cars, planes and computers, it seems that the first-mover often advantage gives the majority of us a second rate product that we’re happy to consume.

Ref 1: Heinrich R Greve, Marc-David L Seidel. Being early beats being better. Harvard Business Review, June 2014.

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How balanced is your company?

The legend goes that accounting was invented by a child during a cricket game. As there were 12 children, one had to sit out and keep score. He was really put out by this and got his revenge by keeping score in such a way that only he could decipher it. And so accounting was born. However, it was an accountant and his colleague that introduced us to keeping score in an entirely new way; and lo and behold in a way that could be easily understood.

 Doctors in the house

 Doctor (now Professor) Robert S Kaplan and his colleague Dr David P Norton discovered that financial measures alone are not sufficient to determine the success of the organisation’s strategy. Financials such as return on equity employed are what are called ‘lagging measures’; they are only indicative of past performance. We also need leading indicators that are markers for sustained performance.
In their book, The Balanced Scorecard, they begin their treatise with a conversation between a hypothetical passenger and a pilot

 Q: I’m surprised to see you operating the plane with only a single instrument. What does it measure?
A: Airspeed. I’m really working on airspeed this flight.
Q: That’s good. Airspeed certainly seems important. But what about altitude. Wouldn’t an altimeter be helpful?
A: I worked on altitude for the last few flights and I’ve gotten pretty good on it. Now I have to concentrate on proper air speed.
Q: But I notice you don’t even have a fuel gauge. Wouldn’t that be useful?
A: You’re right; fuel is significant, but I can’t concentrate on doing too many things well at the same time. So on this flight I’m focusing on air speed. Once I get to be excellent at air speed, as well as altitude, I intend to concentrate on fuel consumption on the next set of flights.

 It’s about balance

This illustrates most aptly that we cannot just use financial performance (mostly a lagging indicator) to determine the potential trajectory of the company. The Balanced Scorecard is a bit of a misnomer, because it is really not a scorecard at all (although it resembles one), but a framework to translate the vision and strategy into operational terms. Although Vision is not dealt with in any great detail – and sometimes they use the term mission – also without clarification – they do provide a beautifully elegant definition of strategy:

 Strategy is a set of hypotheses about cause and effect.

 However they chicken out by also using those long-winded definitions that tries to cover all bases resulting in something only its mother could love:

 …we approach strategy as choosing the market and customer segments the business unit intends to serve, identifying the critical internal business processes that the unit must excel at to deliver the value proposition to customers in the targeted market segments, and selecting the individual and organizational capabilities required. 

 They cite – or I prefer ‘blame – Michael Porter for the above – one of the hazards of always having to reference your work I guess.

 The four perspectives

 However, what is highly original about their work is that Kaplan and Norton propose four perspectives we need to articulate to create shared understanding of the vision and strategy of the organisation (although it is now somewhat common to see more than four measures in some scorecards) . The four perspectives are:

 1. Financial
To succeed financially, how should we appear to our shareholders?

 2. Customer
To achieve our vision, how should we appear to our customers?

 3. Internal Business Process
To satisfy our shareholders and customers, what business processes must we excel at?

 4. Learning and growth
To achieve our vision, how will we sustain our ability to change and improve?

The above four perspectives are somewhat of a reverse cascade. So going from perspective four to perspective one:  we need to decide on what skills and capabilities we must have in our organisation to drive the internal processes to provide value to our customers to reach our financial goals. This is in effect a ‘balanced’ perspective on the organisation.

Maps for guidance

Kaplan and Norton also introduce us to Strategy Maps. Here we take the strategic goals and arrange them in a hierarchy subject to the four perspectives. Although they can get quite complex, this would be a simple generic example:


Source: Wikimedia Creative Commons. Unrestricted.

 I like the fact that they call it a map, because a good strategy is just like a good map – it shows you all the information you need (leaving out the superfluous) to get from A to B.

Keeping score

The ‘scorecard’ element of the balanced scorecard is about monitoring and measuring each of the four categories. Essentially we have four columns:

  1. Objectives
  2. Measures
  3. Targets
  4. Initiatives

Below would be the visual representation of the Balanced Scorecard.


 Adapted from Robert S Kaplan, David P Norton. The Balanced Scorecard. Harvard Business School Press 1996.

 It’s a pity they don’t focus more on the concept of strategy, because that is the very starting point of the process – get that wrong and everything else is pretty much academic. However, there can be little doubt that when it comes to strategy, the most challenging aspect is implementation, and just like cricket, it’s nice to have a scorecard designed specifically for the game.

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Fight it out with strategy

When you’re the age of about two or three you discover something quite devastating. And you never view the world in the same way again. And what do you learn? You learn that the world is not made just for you. You begin to discover that there are scarce resources and that you need to compete for them. For example, you may learn that if you cry louder than your siblings you may get more of your mother’s attention.

The Art of War

So inevitably with scarce resources we get conflict, and we have been in conflict probably since the advent of becoming Homo sapiens. If not before. Forward to 400 BC and we find the The Art of War written by Sun Tzu. It has been deemed a classic in military strategy and you will always find a copy in your local bookstore although most people have probably never read further than the first few pages. And that admittedly includes me. It just isn’t very readable. However it has received praise from lofty quarters, so it would not be prudent for me to comment, as those people have probably read it. However, the Art of War does illustrate something very important – and what it illustrates is that strategic principles are somewhat of a constant. Look at this statement made by Sun Tzu in 400 BC, and compare it with the statement made 2 500 years later by Sam Walton, the founder of Wal Mart.

“To be certain to take what you attack, is to attack a place your enemy does not protect.” Sun Tzu (author of The Art of War) 

“Sears ignored us in the early years, and in the end we simply blew them away.” Sam Walton (Chairman Wal Mart)

Sears were not interested in rural America, even though these small towns would often serve a large number of potential customers. Sam Walton literally saw the gap – the place that his competition was not protecting – and defeated them.

Tricks of war

The term strategy is derived from the ancient Greek word strategia which roughly translated means the art of the general or ‘generalship’. Warfare changed in 500 BC – no longer were wars won by the heroic deeds of individuals – things became more complicated and needed to be coordinated. So, the Athenians appointed the head of each tribe a strategos or commander who practiced strategia or generalship.

The term strategema was introduced in about 50AD by Sextus Julius Frontinus in his compilation written in a somewhat more accessible story style than Sun Tzu – granted Frontinus wrote his treatise 450 years later. His work had the title Strategemata where strategema was literally tricks of war. You can read his work online, and is somewhat more accessible with stories such as the following:

Himilco, the Carthaginian general, desiring to land in Sicily by surprise, made no public announcement as to the destination of his voyage, but gave all the captains sealed letters, in which were instructions what port to make, with further directions that no one should read these, unless separated from the flag-ship by a violent storm.

On War

The name Carl von Clausewitz will be familiar to any military strategist. He was a Prussian general who authored ‘On War’, and although this work was unfinished at his death in 1831, it is still often quoted by modern writers on strategy. His most quoted aphorism is “War is the continuation of policy by other means”.

He advocated 6 principles for strategic efficacy:

  1. Advantage of terrain
  2. Surprise
  3. Attack from several sides
  4. Aid to theatre of war by means of fortifications
  5. Assistance of the people
  6. Use of great moral forces

Interestingly he believed that surprise was the decisive factor, and that focusing on any of the other 5 always cost in terms of surprise. (1) For instance if you wanted advantage of terrain, you may need to be exposed for longer, attack from several sides requires movement and time, also fortifications require time,. And so on for all the other 5. This is somewhat analogous to what my printers always tell me about a job. Say you wanted to print some flyers advertising your services. There are three attributes affecting the outcome: time, quality and price. You can never have all three. If you want the job quickly it will affect quality and or price. If you want better quality, it will affect the time and/or price, and if you want a better price you sacrifice quality and/or time.

Nearly wiped out

Forward to the First World War. BH Liddell Hart was a captain in the British army who had the unfortunate experience of participating in the Battle of the Somme where his battalion was nearly wiped out on the first day of battle suffering 60 000 casualties. It was probably this awful experience that gave rise to his principles which are summarised as the indirect approach. 

There are two fundamentals:

1. Direct attacks against an enemy firmly in position should never be attempted
2. To defeat the enemy one must first upset his equilibrium before the main attack can succeed.

Here we have someone who was profoundly affected by the method of direct attack, and became a proponent of his indirect approach. Is it suitable in all situations? No. Was it suitable for the situation that gave rise to its inception? Probably.

Unfortunately humanity has never been short of war, and consequently generals who have all contributed to the field. Some have a very simple approach, such as General Nathan Bedford Forrest’s strategy: “Get there first with the most men”. I’m sure in his experience he got there second with less men – hence his very focused outlook.

However with all this experience, there’s one cold hard fact: no plan survives contact with the enemy.

Ref 1. The primary reference for this article was: Rich Horwath. The origin of strategy. Strategic Thinking Institute. 2006.
The rest was Wikipedia and some books from the UCT GSB library (with strategy in the title).

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Throw your strategy away

Strategic intent has not entered the everyday lexicon of strategic planning. The reason I think is that it lies outside all the formal methodologies and processes of planning. We are more familiar with a planning process that focuses on what we can do, resulting in a feasibility sieve through which all plans go, to arrive at something that suits us 100%. The problem is that what suits us 100% may not be suitable for strategies that will give us global leadership or some other stretched goal.

Nothing new

Strategic Intent is not a new concept, but was formalised in an HBR article of that title in May of 1989 by Gary Hamel and CK Prahalad. To define Strategic Intent, I’d like to quote directly from this paper:

Companies that have risen to global leadership over the past 20 years invariably began with ambitions that were out of all proportions to their resources and capabilities. But they created an obsession with winning at all levels of the organisation and then sustained that obsession over the 10- to 20-year quest for global leadership. We terms this obsession “strategic intent”

I’m going to share three examples with you. The first comes from this article, and although somewhat dated, is the authors’ articulation of the application of strategic intent, and that is how Canon established itself in a market dominated by Xerox. The second example will be a more contemporary one – the introduction of the iPod versus the Sony Walkman. The third is Honda’s most unusual entry into the American market.

Canon taking a shot at Xerox

The Canon example takes us back to the 1980’s when Canon’s first step into the reprographics business looked a long shot when compared with the $4 billion market that Xerox had. The strategic intent of Canon at the time was deceptively simple: to beat Xerox. The strategic plan? Who knows. Hamel and Prahalad actually go as far as to say that you cannot plan for global leadership – the tools of strategic planning, although of immense value, are of limited use when it comes to strategic intent which implies a substantial stretch for the organisation. For Canon this meant that they had to first get a grip on Xerox’s patents, then license technology that would get them into the market, gear up R&D, then find market niches, then go back to R&D and then licensing its technology to other manufacturers etc etc. 400 meter sprints.

Strategic intent is also a challenge laid down to the organisation. In the case of Canon, they set the engineer’s a target price of $1 000 retail for a home copier – the least expensive copier at the time sold for several thousand dollars. Cutting costs that a conventional strategy would have suggested would not have done the job. Instead with this radical price-performance requirement, the engineers had to virtually reinvent the copier and from which the disposable cartridge system we take for granted today became a reality.

Strategic intent means changing the terms of engagement – refusing to accept the status quo. IBM tried to match Xerox’s business model in terms of segmentation, distribution etc, but eventually withdrew from the copier business. Canon, on the other hand, changed the rules of the game. While Xerox built a wide range, Canon standardised theirs. Xerox had a huge direct sales force. Canon chose office-product dealers to sell for them. Xerox leased their machines – mainly because of the high price – Canon could sell them. Canon’s moves suggest that there is a distinction between barriers to entry and barriers to imitation. IBM who tried to match Xerox’s paradigm had to pay high entry costs – the barriers to imitation were high. But Canon chose to change the rules of the game – to do what the market would reward, not necessarily what their resources dictated what they could do.

Sony yet so far

In 1999 the amazing Sony NW-MS7 MP3 player was launched onto the market to liberate us once again to be able to listen to music anywhere, just as the Sony Walkman had changed our lives in 1979 with cassette tapes (if you don’t know what a cassette is, ask a wrinkly near you). By 2001 there were over 50 brands of MP3 players – hardly the market to look to for saving Apple from its previous year’s $344 million loss. Also, Apple had a shaky track record of introducing new products – anyone recall the Newton? The Quicktake? The Pippin? Well, Apple would like to forget them too.

Along comes Steve Jobs and makes very clear his attitude about market intelligence by quoting Henry Ford “If I asked my customers what they wanted, they would have just said a faster horse.”

He went into the MP3 player business, because of three reasons. Firstly it was growing, secondly we all listen to music, and thirdly no one had got it right. With iTunes he had a complete ecosystem for music (which none of the others had, even though Sony owned Sony Music) – so not only was music portable, but it satisfied the contemporary criteria of “I want it now”.

It was an immense stretch for the company. Everything had to be virtually designed from the ground up. Steve Jobs ignored what they were geared to do at the time – he just did what he felt the market would appreciate. And it did indeed, taking the company from a $344 million loss in 2001 to a $46 billion profit in 2012. And the company has taken strategic intent to a new level, where it has not been afraid to develop products that erode its own market share. As I often like to remind people what we could learn from the closure of Kodak: if anyone is going to cannibalise your sales, make sure it’s you. So the iPhone came out with all the features, if not more, of the iPod and as more iPhones sold, so the sales of the iPod decreased. But if Apple did not make that stretch, someone else would. If you’d like to read more about Apples strategy, I highly recommend John Ashcrofts case study which can be found at applecasestudy.com.

Honda’s entry into the US

I want to end this section with a case that is not specifically an example of strategic intent, but clearly demonstrates the difference between strategy as design – where there is a specific intent, and strategy that emerges. In a paper published in Acta Psychologica by Joshua Klayman, he describes how strategy can emerge through progressive discovery:

Suppose . . . you are a planner who wants to develop a model of patterns of usage for a certain train station. At first, you may have only base-rate information about the average number of people who pass through the station in a week. As you study the station, you may add the factor ‘time of day’ to your model. With further study you may incorporate more subtle factors (e.g., seasonal changes, effects of local economic conditions). As your model becomes more complete, your predictive accuracy increases.

The case I want to end off with is Honda motorcycles and their entry into the US in the 1960’s. However, I want to fast forward to 1984, when Richard Pascale published a paper that gave two versions of the company’s success – one as provided by the boston consulting group and another by the Honda executives themselves who were actually there.

Pascale first shared the explanation by a consultancy which stated, amongst a number of additional strategic elements:

“Their market strategies are directed towards developing high volume, hence the careful attention that we have observed them giving to growth and market share.”

The Japanese executives who launched the motorcycles explained it a little differently:

 “In truth we had no strategy other than the idea of seeing if we could sell something in the United States. Mr Honda was especially confident of the 250cc and 305cc machines. The shape of the handlebar of these larger machines looked like an eyebrow of Buddha, which he felt was a strong selling point.”

What actually happened was that they used the 50cc machines to get around town – people liked what they saw and it started selling. I don’t know what their strategic intent was at the time, so I don’t want to force that concept onto this specific scenario, but sometimes we plan so much that we forget the world has its own plan, and that listening can be the best strategic tool of all.

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Intelligence will just hamper your progress

In the martial arts, the idea is either to feign a move or catch an opponent by surprise. The problem is that your body often telegraphs what you are about to do – your eyes move to the side just a touch, you hunch your shoulders etc. Although I often talk before I think, I did have a problem with this, and in exasperation my sensei exclaimed, “Stop thinking – your intelligence will just hamper your progress!”
Oh, how I have learnt to love that line, and quote it so often to interns who search for the holy grail of strategy.

There are two notable instances where intelligence has been relegated to the sidelines; where a strategy was either just decided upon (strategy as design) or came about through happenstance (emergent strategy). The former strategy birthed the iPod; the latter strategy introduced America to Honda. 1,2

In 1999 the amazing Sony NW-MS7 MP3 player was launched onto the market to liberate us once again to be able to listen to music anywhere, just as the Sony Walkman had changed our lives in 1979 with cassette tapes (if you don’t know what a cassette is, ask a wrinkly near you). By 2001 there were over 50 brands of MP3 players – hardly the market to look to for saving Apple from its previous year’s $344 million loss. Also, Apple had a shaky track record of introducing new products – anyone recall the Newton? The Quicktake? The Pippin?

Along comes Steve Jobs and makes very clear his attitude to market intelligence with Henry Ford’s quote “If I asked my customers what they wanted, they would have just said a faster horse.” He went into the MP3 player business, because of three reasons. Firstly it was growing, secondly we all listen to music, and thirdly no one had got it right. With iTunes he had a complete ecosystem for music (which none of the others had, even though Sony owned Sony Music) – so not only was music portable, but it satisfied the modern criteria of “I want it now”.

When Japan invaded America with motorcycles in the 1960’s, their success was described by the Boston Consulting Group as follows:

“Their market strategies are directed towards developing high volume, hence the careful attention that we have observed them giving to growth and market share.”

The Japanes executives who launched the motorcycles explained it a little differently: “In truth we had no strategy other than the idea of seeing if we could sell something in the United States. Mr Honda was especially confident of the 250cc and 305cc machines. The shape of the handlebar of these larger machines looked like an eyebrow of Buddha, which he felt was a strong selling point.”

What actually happened was that they used the 50cc machines to get around town – people liked what they saw and it started selling – mainly in sporting goods stores. This was uncovered by Richard Pascale in a paper he published whereafter this phenomenon became known as the Honda Effect.

So there you have it: strategy by design, or a strategy that emerges – both devoid of copious amounts of market intelligence’. Like a surprisingly fresh kick to the groin.

Ref 1: John Ashcroft. Apple from the iPod to the iPad – A case study in Corporate Strategy. Second Edition 2012.
2. Gerry Johnson, Richard Whittington, Kevan Scholes. Exploring Strategy. Ninth Edition, 2011.


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Strategy: are you flying blind?

There were six men from Indostan, the most learned of gentlemen, who wanted to expand their knowledge by getting to know elephants more intimately. They excitedly headed out to investigate the elephant up close, irrespective of the fact that they had a most inconvenient handicap: they were all blind.  So goes the story as told in the poem by John Godfrey Saxe based on the Indian parable of the blind men and the elephant.


Strategy is not science


There are a number of strategic schools of thought, all proffering a model that, should one copy it, will provide the strategic direction one seeks. We are a creative industry, and often have no hesitation in constructing our very own proprietary model – the secret sauce that will provide for superior outcomes. But strategy is not science. A model can work in one situation, but fall desperately short in another. It is not uncommon to feel one is drowning (usually in data) or treading water (due to lack of data), so one can understand our desire to grab a life preserver. Anything that will actually keep us afloat. Although strategic models (or frameworks if you prefer) do allow us to overcome vacansopapurosophobia (fear of the blank page), they are nothing more than a flotation device to keep us on the surface.


Religion and politics


Although I am loathe to talk about religion or politics, the birth of strategic theories bears an uncanny resemblance to how religions permeate society. It starts with a prophet (academic) with an insight. They apply it to a situation and see that it works – the revelation stage. It gets published as a book or an article in Harvard Business Review and people get hooked who subsequently become evangelists to that school of thought. People become converted en masse. People start arguing about it and then we reach the final stage – the braai disintegrates into a tense afternoon of bitter acrimony where the hot coals of opinion should rather have waited until all the lefties (or the righties) had left. Even Malcolm Gladwell’s much vaunted 10 000 hour rule is now going through that period of disapproval (or apostasy if you want to keep to the analogy).


For example the BCG matrix was ‘it’ in the 70’s which illustrated quite nicely the difference between a gap in the market and a market in the gap. Michael Porter’s Five Forces was huge in the 80’s (and still is). And then came the Balanced Scorecard, Blue Oceans etc etc etc. Or, if you prefer, bla, bla, bla.

As Gary Hamel and CK Prahalad caution us: “It is not very comforting to think that the essence of Western strategic thought can be reduced to 8 rules for excellence, 7s’s, 5 competitive forces, 4 product life-cycle stages and innumerable 2-by-2 matrices.”


The elephant in the room


So where do these six blind learned men of Indostan fit into the story? Well, they see the elephant from their unique perspective. The man who touches the tail ‘sees’ the elephant as rope; the leg and it’s a trunk of a tree; the body and it’s a wall; the tusk and it’s a spear; the ear and it’s a fan. So, as John Godfrey Saxe’s poem sums it up:


And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!


Strategic models or frameworks emerge from a certain perspective. Strategy, I feel, is more closely aligned to ‘story’ than it is to process or methodology. Starting every story with ‘once upon a time’ is fairly open, but who says that it has to be a forest, or a castle for that matter? The only thing these additions to the framework do is to literally narrow our perspective. The payoff of using prescriptive frameworks is that you just have to connect the dots, but then a paint by numbers strategy, besides being so awfully boring, can have disastrous consequences, as you may just ‘miss a spot’ (with subsequent loss of market share) or miss the G-spot altogether. The best way to avoid these unhappy endings is a wide perspective. Or as Dr Seuss would say: ‘It’s opener there, in the wide open air’.


The upcoming ‘Strategy Unplugged’ is a one-day experience hosted by Sid Peimer. It is ideal for anyone wanting to get a better ‘handle’ on strategy. Visit the course page for details.

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The eBay PEZ dispenser story is not true

Life poses an interesting enigma: although we can make the atomic bomb, we still don’t know the answer to simple things, like where do songs come from? Where do ideas come from? The epiphany, or eureka moment, is not what you think – it is not an isolated moment of ‘aha’; it is preceded by years of what could loosely be called work. (1)


 An apple on the day

The story goes that Newton was sitting under a tree. An apple fell on his head – and so the idea of gravity was born. That’s a myth. The ‘epiphany’ came after 20 years of work to explain gravity. Even if the apple story is true, he studied so many other things, that the apple would just have been ‘the last straw’ – and not an isolated incident. (1)

 Tim Berners Lee, the man who invented the web, shares his thoughts:

 “Journalists have always asked me … what the singular even was that allowed the web to exist … They are frustrated when I tell them there was no eureka moment… it was a process of accretion (growth by gradual addition).”


 Dispense with the eBay myth

And then there’s the myth of eBay. We all ‘know’ that the founder created the company so that his fiancée could trade PEZ dispensers. It’s untrue – eBay came about by trying to create a perfect market economy. No one was interested in that story, so eBay was largely ignored in its formative years. The media were less than impressed. However, when the PEZ story emerged (from somewhere), the media lapped that up – it was so much more interesting than trying to create a perfect economy. The PEZ element did play a part – it made the founder Pierre Omidyar aware that people are passionate about collecting things – just one milestone to the ‘epiphany’ of creating eBay. (1,2)


 There’s a fine line between crazy and creative

 Innovation is defined by the Mirriam-Webster dictionary (I don’t have the Oxford one – it’s not online) as the act or process of introducing new ideas, devices or methods. Essentially innovation is about ‘newness’.

Creativity, on the other hand, is defined as ‘the ability to create’. That’s not much help. But if we look at the definition of create, it does allow us to delineate innovation from creativity. ‘Create’ is defined as: to produce something new by using your talents and imagination.

So creativity is conception and innovation is newness. The conclusion to be drawn from that is that you first have to conceive something before you can innovate; you have to be creative to be innovative. But I don’t believe that to be necessarily true; I’ve met some brilliant businesspeople who don’t have a creative bone in their body, yet have produced remarkable innovations.

The talent for taking two unrelated objects and finding a connection between the two is called associative ability. Dean Simington, the professor of psychology at UCLA states (something like this): “Persons with low associative barriers may think to connect ideas or concepts that have very little basis with reality or that can easily be traced logically”.  Scott Berkun, the author of The Myths of Innovation encourages us to read that sentence twice, because it clearly explains the fine line between lunacy and creativity. (1)


The last piece of the puzzle

Berkun uses a lovely analogy to explain the epiphany: it is the last piece of the jigsaw puzzle, not the entire picture.

That’s also why we categorise creative people as heavy, medium and lightweight. It’s based on the amount of jigsaw puzzles they’ve completed, because the more jigsaws you do the better you get – no matter what the picture is.

To find out how you can enhance innovation in your company, irrespective of your creative ability, imagine what it would be like to be part of the Innovation Generation – visit www.stratplanning.com or call Sid Peimer on +27 (0) 082 659 9167.



1. Scott Berkun. The Myths of Innovation. O’Reilly Media, 2010.

2. Interview with Pierre Omidyar. http://techcrunch.com/2010/03/20/pierre-omidyar-on-ebay-and-pez-dispensers-leaving-the-valley-and-the-most-important-thing-he%E2%80%99s-ever-done/

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LEGO excelled at innovation – and it nearly killed them.

Take six standard Lego bricks, and there are more than 915 ways to stick them together. Actually that’s incorrect; there are 915 MILLION permutations. I think ‘endless hours of fun’ is most appropriate in this case. LEGO was the world’s most profitable and fastest growing toy company from 2007 to 2012, but the past wasn’t all that rosy – the company had a near-death experience in 2003. So how did this happen even though they ticked all the boxes for innovation?


The building blocks of innovation

LEGO managed innovation in a somewhat more ‘textbook’ fashion. This was in stark contrast to Apple where Steve Jobs had the final say of what would or would not go to market. If he never came to work, no new products would come out the pipeline. The LEGO process was, in comparison, decentralized. LEGO CEO Jørgen Vig Knudstorp stated that he could leave his company for three months, and its innovation process would continue unabated. I’m not saying that any one method is better than the other. In contrast, LEGO’s methodology was fine, as you shall soon discover.


The whole truth

There are seven truths to innovation proposed by David Robertson, and this is how LEGO did all the right things in the wrong way (1):


1. Hire diverse and creative people.

They did hire the best creative minds, unfortunately there was no communication between design and production, or even marketing for that matter. Nothing that came out the system made profitable sense. Although some of the products were awesome.


2. Head for blue ocean markets

Blue Ocean Strategy is a concept proposed by Chang and Mauborgne that purports that an organization should create new demand in an uncontested market space, or a “Blue Ocean”, rather than compete head-to-head with the competition in the same way with the same products in a “Red Ocean”. (2) Not exactly brain surgery, but makes a valid point (although the junkyard is littered with those who drowned in blue oceans)


Other companies were producing similar bricks, so LEGO went for the blue ocean and came up with the LEGO Studios Steven Spielberg MovieMaker. It took off relatively well in the States, and Lego then rushed to give the market add-on sets to be used with the original kit. Without the camera kit, these add-ons meant nothing – so the line got flooded and it wasn’t long before the add-ons hit the discount bins at the retailers. And so MovieMaker became an unprofitable line and it was ‘The End’.


3. Be customer driven

The market wanted ‘edgier’ products – kids were now playing pretty violent video games. They brought out a character called Jack Stone – a kinda superhero who would save the day. He was about as edgy as a tennis ball, and neither did parents find any of the core LEGO values in it: “the joy of building, pride and creation”. Jack Stone took a bullet to the head.


4. Practice disruptive innovation

It was time to fish where the fish were: in the video games arena. Forget about the physical joy of building, just go digital in a big way. So they tried to duplicate the experience digitally, which required the computerisation of every single LEGO part. It was an enormous ground-breaking project appropriately called DARWIN. Maybe it was too soon (the technology to create 3D wasn’t very advanced at that stage) and they tried to create everything – taking LEGO completely into the digital realm. Irrespective of the technological problems, the DARWIN team proceeded independently and just tried to reproduce the total experience in a virtual world. This was too big a task too soon, with the added advantage of limited feedback from top management – no one high up was digital-savvy. So DARWIN’s evolution became extinct. The site has since gone digital, but under a very different paradigm without trying to replicate the physical building experience.


5. Leverage the ‘wisdom of the crowd’

LEGO came up with a digital service called Design ByMe. You could put together your own custom design and LEGO would ship you the appropriate parts. The truth is that people aren’t really that creative (as Steve Jobs often reminded us), and with the expensive price tag for bespoke sets, the crowd wasn’t that wise at the end of the day. It too died.


6. Explore the full spectrum of innovation

LEGO had great success with the Star Wars and Bionicle range. They came with a rich story background, and kids were eager to get their hands on it. So LEGO decided to go for the whole channel: invent a character and then make the TV series. The item was Gallidor which featured a unique build – not one of the traditional bricks came with the kit. LEGO knew that only one in five action figures was a success, but they felt they had the control, and what’s more, kids loved it in focus groups. To cut a long series short, the TV programme was awful and once again you would find Gallidor in the discount bin.


7. Build an innovation culture

There was an enormous innovation culture at LEGO. The problem was that there was no feedback loop (no one learnt from their mistakes), poor communication between innovation cultures and creativity was put on somewhat of a pedestal immune from guidance of the brand’s value proposition. Ideas flourished. Products bombed.


An amazing comeback

LEGO revisited each of these issues to experience a major resurrection. In 2012, the group increased revenue by 25% to over $4 billion – nearly triple the sales of 2007. (3).

So now you can build a full-size Rolls-Royce aircraft engine by using just 152 000 bricks. It doesn’t work though, but it’s great fun.


To find out more about joining the Innovation Generation in just one day, contact Sid Peimer on 082 659 9167 or sid@stratplanning.com . And you get to play with real LEGO.



1.David C Robertson (with Bill Breen). Brick by Brick. How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry. Crown Publishing Group, 2003.

2. Blue Ocean Strategy. Wikipedia. http://en.wikipedia.org/wiki/Blue_Ocean_Strategy

3. Successful LEGO strategy delivers continued strong growth. http://aboutus.lego.com/en-us/news-room/2013/february/annual-result-2012

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Nomophobia: a growing problem with no solution in sight.

58% of men and 47% of women suffer from this disease. (1) I personally think it’s getting worse with very little relief in sight with more and more people contracting the illness. Technology has not come to the rescue; on the contrary, technology has made it worse.

Nomophobia is the abbreviation for “no-mobile-phone-phobia”. It’s not a great choice of word – described as somewhat of a ‘faux-Greek’ by one Michael Quinton who informs us that ‘nomos’ means law in Greek. But fear is fear (however you can’t bribe your phone no matter how smart it is).


The stress test

In research commissioned by the UK Post Office (why?), the organisation YouGov found that mobile phone users tended to cite the main reason for the anxiety was that they would be out of touch with friends and family. The study looked at stress levels, finding that an average case of nomophobia induced stress equivalent to wedding day jitters and even a trip to the dentist. Ten percent of respondents did however say that they needed to be contactable at all times because of work. (1), “What’s that music in the background?” was a question that I developed convincing answers to during working hours.

Frontrange asked people what would happen if they went without their smartphone for a week. Sixty six percent of people said they would not last one day. Forty-four percent of people said they would give up their phones for a week if they were paid more than $100. Nineteen percent said they would need more than $500. (2) I presume the remaining lot could be described as committed clingons – you’d have to scrape them off their smartphones.


An iPad a day does not the doctor keep away

The situation gets medically worse. Recent studies from Asia into internet addiction have provided evidence of a genetic link between serotonergic and dopaminergic neurotransmission (in other words, chemicals in the brain) and internet addiction. Although causality is not evidence (for example, people are not less hard working because you can’t reach them on Wednesday and Friday afternoons), but they did find one gene that was implicated in the issue of internet addiction: the CHRNA4 (nicotinic acetylcholine receptor subunit alpha 4). So if you get caught on Facebook at work, you are perfectly in your rights to blame your genes – and hence your parents. (3)


Mobile is a layer

Chances are, if you reached out with your arm right now, you could get your smartphone (if you’re not reading this on your phone already). Mobile telephony is different – rather than a medium, it has become a layer over our lives. We use it while watching TV, driving (we text in a moving car with lethal consequences – such as a spelling error) and even operating heavy machinery. You could say it’s something like the radio, but when you need to phone to chirp in on the radio, it’s a lot more difficult than a retweet.


No cure – yet

Although there is no ICD-10 code* yet for this specific affliction, researchers into the phenomenon offer some pointers: (4)

  • If you’re on prepaid, keep your credit topped up.
  • Carry a charger (car, laptop and wall plug) at all times.
  • Give family and friends an alternative contact number.
  • Carry a pre-paid phonecard to make emergency calls if your cellphone gets lost or stolen.
  • Keep a record of your numbers in case you lose your handset.
  • Carry the phone in a closed pocket or bag to avoid loss or theft.
  • Get a second phone and have adequate tranquilisers to get you through the four hours needed to activate your SIM swop (that’s my tuppence).

 Or you can always go cold turkey: just switch off the phone.

To find out more about consumer afflictions and strategy in general, view Sid Peimer’s training courses on www.stratplanning.com. No train, no brain.

 * An ICD-10 code is the required classification for any medical condition that is being treated. It allows the government to collect stats and medical aids to be difficult. You’ll see it on the invoice from your psychiatrist.


1. Wikipedia. http://en.wikipedia.org/wiki/Nomophobia
. Kristin Piombino. Your guide to surviving without your smartphone. Entrepreneur January 12, 2014. http://www.entrepreneur.com/article/230764
. Montag C, Kirsch P, Sauer C, Markett S, Reuter M. The role of the CHRNA4 gene in Internet addiction: a case-control study. J Addict Med. 2012 Sep;6(3):191-5. http://www.ncbi.nlm.nih.gov/pubmed/22722381
. Nomophobia is the fear of being out of mobile phone contact – and it’s the plague of our 24/7 age. Mail online http://www.dailymail.co.uk/news/article-550610/Nomophobia-fear-mobile-phone-contact–plague-24-7-age.html


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Why insights should not be in creative briefs

Don’t panic. I’m not saying that insights aren’t important. I’m just saying that they’re not a prerequisite for great advertising. If you have that rectangular block in your brief labelled ‘Insights’, I would suggest you remove it forthwith. I will explain why shortly. I also suggest you remove the rectangular blocks themselves – creative should not be presented with a form that looks like an IRP5 – briefs, believe it or not, need to look inviting.


A definition

I have defined an insight quite simply as *

  1. An understanding
  2. That can be leveraged for a result
  3. In a certain dimension (time and space).

As an example, I will use my stint as a lecturer to first year marketing students who had been freshly released from school. Coming to grips with their new-found freedom, they were somewhat difficult to control. If I had something important to say (which happened from time to time), asking them to be silent for a moment would have had very little effect. So I devised this trick: I would say at the top of my voice “CONCERNING THE EXAM”. You could hear a pin drop. Why?

Relating to the above definition:

  1. I understood that they were totally averse to studying anything that wasn’t going to be in the exam. Heaven forbid.
  2. The result I got was silence.
  3. The dimension was the classroom just before exams (had I tried the same strategy after exams, it would have had little effect).

To discover more on strategy and insights, attend Sid Peimer’s course in Durban, Cape Town and Joburg this month: Essential Strategic Planning Skills for Client Service Creative and Non-Planners this month in Durban, Cape Town and Joburg.


All that the creatives need

Creatives don’t need an insight (as described above) to create great advertising. I must admit, and hopefully will escape prosecution for having reverse-engineered an insight in the past to fit in with a great concept. I guess some things are not below me.

All the creatives need is a clear description of the target market. LSM should never be in your description of the target audience in your creative brief. I’ve been in the business for 15 years and I still don’t have a clear idea of the consumer when I’m given LSM’s in the brief. Describing the consumer as LSM 10, income above R30 000, 30+ and male would include my uncle, Clint Eastwood as well as a number of very successful drug dealers. However, I did input my details into the LSM calculator and found out that I was LSM 9 due to the fact that I did not have DStv. I now have DStv.

So what best serves creatives? All they need to know is who they’re talking to. They don’t need a description of the exact person (eg Angela lives with her aunt in a middle-class neighbourhood and wants to own an iPhone); neither do they need a sweeping ‘males over 35’. There is no specific formula, but if there’s LSM in your creative brief, you might as well not be working there – you’ve added no real value to the process.

However, insights can play a crucial role; my argument is just that an insight is not a compulsory prerequisite for great advertising. Sometimes, however, a deceptively simple insight can create a beautiful strategy (yes, strategies can be beautiful). The following strategic insight by SSP3 Colombia is elegance personified. (1)


Insights against terrorism

In 2011, the FARC terrorist group in Columbia was responsible for committing a terrorist act every three days. The agency was asked to come up with a strategy to demobilise them (ie get them to go back home, as opposed to living as outlaws in the jungle). Interviewing 200 ex-guerrillas revealed a powerful insight: Christmas was a difficult time for them, as they were far removed from their homes where they could celebrate with family and friends. They were literally trapped in the jungle.

The agency came up with something extraordinary: Operation Christmas. I quote directly from the award-winning paper:

Two professional anti-guerrilla contingents, 2,000 LED lights, and 2 Black Hawk helicopters travelled into the jungle to find and cover giant trees with Christmas lights. Placed alongside the guerrillas strategic walking paths the lights would come on when they approached, with banners exhorting them to lay down their arms becoming visible too. The powerful, timely and well-located messaging encouraged 331 FARC guerrillas to demobilise and re-enter society – a 30% uplift on the previous year. In challenging circumstances, planning drew together powerful insights to create a core, successful, thought – taking the spirit of Christmas to the guerrilla strongholds.

All I can say is ‘wow’. Now that’s an insight. Simple. Beautiful.


To discover more about strategy, attend Sid Peimer’s course in Durban, Cape Town and Johannesburg: Essential Strategic Planning Skills for Client Service Creative and Non-Planners in October 2013.


* Diageo has a similar definition in the public domain: An insight is a penetrating observation about consumer behaviour that can be applied to unlock growth. My insight definition was developed in 2005 before I became aware of theirs this year.

Reference 1: Juan Pablo Garcia. Colombian Ministry of Defence: FARC Operation Christmas – Reaching the soft-side of hard-core guerrillas. Account Planning Group – (UK). Grand Prix; Best channel strategy; Best use of research, Creative Strategy Awards, 2011.

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E3 Errors are killing agencies

Say for example there is a drug on the market that enhances creativity. Just say.
We call that Drug A. We develop a new drug to compete with Drug A, which we call Drug B. If we do clinical trials and find that Drug B is better than Drug A, but actually A is better, then we have made an E1 error. If we conclude that Drug B is no better, but it actually is, we have made an E2 error.

An E4 error (we’ll get to E3 in a second), is when you intentionally focus on the wrong issue (such as saying Drug B is better for headaches), and you are doing it for personal gain, because it just happens to be a larger market.

The E3 error

I leave E1 and E2 errors to the statisticians and E4 errors to the politicians. What concerns us here, and is killing agencies, is the E3 error, which simply stated is: solving the wrong problem precisely, or as I like to say, “There are many ways of solving the right problem; there are no ways of solving the wrong problem”.

To find out more on E3 errors, attend Sid Peimer’s course Essential Strategic Planning Skills for Client Service Creative and Non-Planners in October. It will be held in Durban, Joburg and Cape Town. Book now: don’t lose your space – there are only 200 seats available nationwide.

Mitroff and Silvers (1) in their book Dirty Rotten Strategies, lambast our education system for blinding us to the difference between exercises and problems. “I need a campaign for brand X” is not a problem unless we uncover all the reasons that have led to that need. We are usually quite capable of producing a campaign, which is more of an exercise than a problem solving process. We soldier straight on, thinking that the problem stated is the problem to be solved. But that is seldom the case. If the client then accepts the exercise you’ve produced, are you really adding value?

We are not technicians

If you want to see yourself as a technician, then by all means focus on E1 and E2 errors. However, if you want to be seen as a strategic partner, your radar should constantly be scanning for the E3’s: solving the wrong problem precisely. Coca-Cola learnt it the hard way with their CEO, Ken Ivester, being fired as a result. The crisis began in 1999, when Belgian schoolchildren complained that the Coke tasted ‘funny’. This was no laughing matter, because soon afterwards they began suffering headaches, nausea and vomiting (although the fact that just attending school can actually produces these symptoms was overlooked). Coke engineers quickly found that the difference in taste was due to a new carbon dioxide being used in the carbonation process.

Problem solved. Not.

There was nothing unhealthy in the Coke, so Coke was quick to provide a ‘rational’ explanation and get on with whatever Coke executives do on a day to day basis. Here’s the E3 error: they saw the problem as a technical one, requiring everyone (especially the hysterical parents of the sick children) to accept their explanation and carry on with their lives.

Coca-Cola saw the quality engineers as the relevant experts – actually they saw them as the only experts in the solution. It was an E3 error – the primary and expert resource was actually the PR department. Parents expected empathy for their plight, except they got an explanation. The huge outcry that followed resulted in the largest recall in the company’s 113 year history: 30 million bottles and cans, accompanied by a total ban on Coke products in Belgium. Ouch.

E3 errors in agencies

By the time we get the brief, client has made a number of assumptions based mainly on the desired (and most frequent) outcome: sales. The primary assumption is that they assume consumers will respond to their message in a rational way. We know that we’re often speaking to the same consumer who will travel an extra 10 km to save R1 on a tub of margarine. So we can safely exclude the word ‘rational’ from our analysis.

But just taking the brief is a dangerous way to go – after all, you carry the bulk of the outcome on your shoulders. Or stated more explicitly – if it doesn’t work it’s your fault.

Is Mummy right?

Let’s take a fictitious margarine, ‘Mummy’s Marge’ as an example. You have been briefed to place an ad in a health magazine, because the point of difference is that it contains less fat. But why are you being briefed? Is it because sales are flagging? Why are sales flagging? If competitor spend is not the reason, then what is? Is it being displayed prominently in-store, or do retailers see it as a niche product and don’t see that ‘eye level is buy level’ should apply? If that’s the case, then surely the retailers are our target market? Should we not be convincing them to display this product (which gives a higher margin than ordinary margarine) more prominently? Should we not be looking at on-shelf promotion? Should we not be looking at researching new packaging? Actually we don’t really know at this stage, but you, together with the client, need to find out. Otherwise you’ll be joining the litany of E3 wrecks that clutter up the highway. Just ask Coke.

How to save yourself from E3 errors

To find out more on E3 errors, attend Sid Peimer’s course Essential Strategic Planning Skills for Client Service Creative and Non-Planners in October. It will be held in Durban, Joburg and Cape Town. Book now: don’t lose your space – there are only 200 seats available nationwide.

Ref 1: I Mitroff, A Silvers. Dirty Rotten Strategies. Stanford University Press 2010.

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It's like the Gods Must Be Crazy except the Coke bottle is an actress

When writers pitch their screenplay they need to position the movie relative to something the studio executive knows. For example, Argo would be “The Great Escape meets the Ayatolla”. What really goes on in Hollywood pitches was somewhat of an enigma until Kimberly Elsbach of UCLA and Roderick Kramer of Stanford spent five years totally immersed in the process. (1)

Their much lauded study appeared in the Academy of Management Journal where their central finding was that the success of the pitch depended as much on the catcher (the studio exec) as on the pitcher (the writer). (2)

An elaborate ritual, but just 2 processes

Beneath this elaborate ritual, two processes were at play. Firstly the catcher used certain cues to judge the pitcher’s creativity; attributes like passion wit and even quirkiness. Slickness, trying too hard and lots of different ideas were seen as negative cues. If the catcher was more influenced by the negative cues, the meeting could essentially be over in the first few minutes.

However there was a second process occurring at the same time: in most successful pitches, the pitcher didn’t push the idea onto the catcher until a ‘yes’ was extracted. Instead the catcher was invited in as a collaborator. The more they were allowed to collaborate, the greater the chance of the idea being greenlighted. The purpose of the pitch should therefore not be to move others to immediately adopt your idea, but to offer something so compelling that it begins a conversation, allowing both parties to play the ideal role: to be participants.

It’s the same in the simulator

In simulated pitches on my courses (I’ve done about 100), the same issues come up time and again. Although delegates often label this as ‘just an exercise’ (they only have 20 minutes to prepare and 5 minutes to present), having sat on the client side of numerous pitches, I firmly believe that the same issues would have arisen had the pitch process been ‘for real’. As Parkinson’s Law states: A task will be accomplished in the time allocated to it. (3). It has also been said that very little work would come out of an agency if it wasn’t for the last minute. (4) I trust you get my point.

Below is a table that separates the winners from the losers in the simulated pitch environment.



Stuck to the 55/5 rule*

Went straight for objectives

Defined the problem – sometimes breaking it down to its components.

Regurgitated the brief

Accepted the situation

Saw the timeframe as unrealistic, and that this ‘is just an exercise’ – it would be different in real life. It isn’t.

Played down the puffery

Included irrelevant ‘puffiness’. Took wooing to a level of discomfort.

Brought it back to one thing

No cohesive concept

What they didn’t know, they explained how they would find out, and why they needed to

Showed how much they knew

Had very logical structure

Just information – no story

Were sensitive to the existing business

Proposed dramatic change

Body language supported what they were saying

Mouth said one thing, their manner said another

Wetted my appetite – gave me a few tactics (just to give me an indication of the application of strategy – not to show how marvellously creative they were)

Either focused on tactics at the expense of strategy, or left out tactics altogether

* The 55/5 rule is Einstein’s maxim: “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”

An MP3 audio ‘Pitching and Dating’ which focuses on relationships in pitching can be downloaded from the Stratplanning homepage here www.stratplanning.com


  1. Daniel H. Pink. To Sell Is Human: The Surprising Truth About Moving Others Riverhead, 2012.
  2. K D Elsbach, R M Kramer. Assessing creativity in Hollywood pitch meetings: Evidence for a dual-process model of creativity judgements. The Academy of Management Journal, Vol 46, No. 3 (June 2003), pp 283-301.
  3. There are a number of variations on Wikipwedia http://en.wikipedia.org/wiki/Parkinson’s_law
  4. Not sure if I read this somewhere or made it up.

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Problem finders are better creatives than problem solvers

The subject of creativity is an elusive one (especially on Fridays at lunch time). Equally elusive is the pronunciation of the legendary social scientist’s name who researched the topic and revolutionised our understanding of what makes a ‘good creative’: Mihaly Csikszentmihalyi. You pronounce his surname chick-sent-mee-hali (the ‘y’ is silent).

Back to school

One day Mihaly drove to the School of Fine arts in Chicago and recruited a bunch of fourth-year art students for an experiment. He invited them (one at a time) to a studio in which there was a table that had 27 objects on it. The students were asked to select any number of objects, and to arrange them as a still life which they would then draw. (1)

The artists approached the task in one of two ways: one group chose the objects that appealed to them and proceeded to draw; the other group handled more objects, rearranged them several times and took longer on the task. As Mihaly saw it, the first group was trying to solve a problem; the second group was trying to find a problem.  The first group asked themselves “how can I produce a good drawing?” The second group asked themselves “what good drawing can I produce?” A subtle difference, but a not-so-subtle result.

Judgement day

Mihaly then proceeded to determine the effect. He put the drawings on show and asked a panel of experts to judge the works. When he tabulated the results, the problem finders won by a mile. However, the experiment gets even more interesting. Ten years later the same artists were tracked down. About half had left the art world altogether; the other half were working as professional artists. The composition of the latter group?  Nearly all the problem finders from the original experiment.

It has nothing to do with technical skill

But he didn’t stop there. He patiently waited another eight years, and discovered that the problem finders were significantly more successful than their peers. Jacob Getzels, who worked with Mihaly, concluded: “It is in fact the discovery and creation of problems rather than any superior knowledge, technical skill, or craftsmanship that often sets the creative person apart from others in the field”. In subsequent research, they, and other researchers, found that the people most successful in art and science tended to be problem finders.

The Haas School of Business at the University of California, Berkley, now offers a course in “Problem Finding, Problem Solving”. This is based on the premise that to be an innovative leader, you need to be able to frame the problem; to determine what the problem really is before you can even to begin thinking of solving it.

IDEO, the much revered innovation and design company, is a proponent of  the five whys methodology. They use the ‘five whys’ is an exercise that forces people to examine and express the underlying reasons for their behaviour and perspective, allowing them to discover the real problem that needs to be solved.

May I have the envelope please

When that brown envelope (i.e. brief) lands on your desk, it’s not an instruction to produce work, but rather a treasure of tantalising clues that can lead you to the real problem. You can then produce creative work that strikes at the very heart and soul of those whom we need to influence. Because at the end of the day advertising is not art, neither is it science; advertising is persuasion.


  1. Daniel H. Pink. To Sell Is Human: The Surprising Truth About Moving Others Riverhead, 2012.

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The innovation blind spot and avoidable failure

An innovation blind spot cost Philips Electronics $2.5 billion in the form of write-offs. They brought out the magnificent HDTV in 1980; unfortunately they were 20 years too early. The hi-definition cameras and transmission standard – which was needed to make HD deliver – failed to arrive in time. However, this was somewhat less painful than Pfizer’s R2.8 billion write-off from Exubera – a ‘sure winner’.

Exubera – not so exuberant

In the early 2000’s there were more than 370 million diabetics worldwide of which a fair share had to administer insulin by injection. Inhalable insulin (like an asthma pump) was seen as a major breakthrough. There is a great deal of reluctance when it comes to having to administer insulin by people who develop type 2 diabetes later in life (type 2 is mainly due to an unhealthy diet and poor lifestyle choices).
The stigma of the injection results in an unfortunate five- to eight-year window between the time the patient should start on insulin injections and the time they actually begin treatment. The new method of inhalable insulin was seen as the magic bullet – not only would it decrease the window of type 2 treatment, but would also allow insulin dependent users to simply inhale as opposed to inject. The stage was set for a blockbuster product.
Pfizer was the leader in inhalable insulin with Exubera, and it wasn’t long before they received FDA approval in 2006, but with a caveat: all patients must have a lung function test prior to therapy, to make sure their lungs could actually absorb the insulin. Fair enough. Pfizer predicted sales of $1.2 billion in the first year. The result? $12 million – 1% of target. So it came as no surprise that they pulled the plug on Exubera with a painfull write-off of $2.8 billion.

One broken link breaks a chain

Although a first-generation and bulky product, Exubera did not fail because of what it could or couldn’t do. It failed because the ecosystem would not support it. When pharmaceutical companies roll out a new product, they usually target the specialists first (in this case endocrinologists) to whom the GP’s would look for guidance. That wasn’t a problem – endocrinologists loved the product, but it was the FDA caveat that sunk the whole deal.
To check lung function you needed to have a spirometer, which you can find at your local GP. However, lung function is the domain of mostly pulmonologists who treat asthma sufferers, not endocrinologists who treat diabetes. So to comply with FDA requirements, the patient visited the specialist, then needed to go to the GP for the lung function test, and then come back to the specialist (for which the patient would probably have to wait another month for an appointment). Not a great scenario for the patient (or the medical aid that now needed to fork out for an extra two visits). Coupled with the introduction of a new generation of ‘insulin pens’ making administration easier, the death of Exubera was sealed.

Run-flats go flat

In 1992, a group of Michelin executives set themselves a goal to come up with the next big innovation in tyres. The result was the PAX system, or as we know it – the run-flat tyre. Market research showed overwhelming support for the product amongst customers and car manufacturers alike. Mercedes were first to sign on. And then a host of other carmakers. Unfortunately so did Mini. When I got my first flat tyre, I felt smug in the knowledge that I could ride up to 50 km to a tyre service centre that would repair the tyre, and I’d be on my way. I had only ridden about 10 km when I pulled into a tyre replacement centre.
They inspected the car and told me I needed a new tyre. It also had to be a run-flat to match the others on the vehicle. I reluctantly paid four times the amount of what a regular tyre would have cost. I chalked that up to bad luck. Until I had my second flat. This time I was told that, not only was the tyre beyond repair, but that I would need two tyres as the mismatch in tread was too great to just replace the one. I ambled over to the pharmacy to get a repeat of my tranquiliser, and was now the proud owner of three new run-flats that cost the equivalent of a month’s payment on the car. Actually a little more, but who’s counting?

The broken link

I have eventually discovered the tyre dilemma. And so did Michelin, however not in that order. To fix a run-flat requires specific knowledge and equipment. Cars were being launched with run-flats, but the service centres that could repair them were non-existent (you needed special equipment and training that the tyre service centres were reluctant to adopt – much easier just to tell the customer you can’t fix it – and sell them a new one). Car manufacturers started to pull out. I’ve just purchased our third Mini, and in perusing the invoice I noticed the one item that sent a shiver down my spine. Run-flats. I certainly hope they’ve sorted out the service centre issue.
Failures such as the above did not come about because of lack of consumer insight, or even demand, but because the brand’s ecosystem was deficient. In the case of Philips HDTV, there wasn’t any content; for Exubera it was simply the absence of a spirometer in the endocrinologist’s office and for Michelin there was no network to repair run-flats. The lesson? Always check the ecosystem – it just takes one link to break the chain.

Reference: Ron Adner. The wide lens – a new strategy for innovation. Penguin Books, 2012.

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Sergei P Nepobedimyi: how reframing can save your life (& your job)

Sergei was the inventor of the Sagger missile. Basically it was an RPG (those rocket propelled grenades that are fired off-the-shoulder in the movies), but it came with a twist – you could fire at a target 3 km away (ten times further than an RPG) – with an even more destructive effect. It had a devastating impact in the Middle East during the conflict of 1973, where 180 tanks were lost on day one, mostly courtesy of the Sagger. (1)

No solution in sight

At first, the tank commanders were mystified – there were no enemy tanks or RPG’s in sight, yet they were getting knocked out with alarming frequency. As the battle went on, some clues emerged – those who were on either side of the knocked out tank noticed a red light moving towards the tank just before it was hit. They then found a trail of wires leading to the stricken tank. The problem had been discovered: The Sagger missile.

The Sagger was a wire-guided missile that could be fired from a considerable distance by a soldier lying down in a shallow depression in the sand. He/she only had to fire in the general direction of the tank and could then use a joystick (bit of an oxymoron here) to guide it to its target. It had a red light to enable the shooter to keep track of it all the way to contact.

What was the problem? On the face of it, it appeared that the Russians should never have sold the Sagger in the first place (but it was too late to address that issue). They could have all lined up in single file facing enemy territory, only sacrificing the front tank with each missile. But that’s not how you win a battle, it’s how you queue for the cinema. There appeared to be no solution.

A solution emerges

However, on further analysis it was revealed that the missile travelled relatively slowly and that the shooter had to have eye contact with the missile all the way to the target. So we could reframe the problem as: preventing the shooter seeing the target. In the desert that’s simple – if you have a tank. You just create a lot of dust. And that’s what they did – obscuring the tank from view every time they spotted the red dot. They also fired in the general direction of the red dot as good measure, to distract the shooter even further. It worked. (1)

Reframing gives more options

Reframing a problem can make an enormous difference to the efficacy of a successful strategy. Rather than asking ourselves what would get the consumer to buy our product, it can be very illuminating to ask ourselves why our customers would not buy our product. Small tweak, big change in perception.

When you ask the question framed differently, you get a different answer. For example: (2)

“What is the sum of 5 + 5?”

“Which two numbers add up to 10”?

The latter option two gives us a lot more choice. As Albert Einstein said, “If I had an hour to solve a problem, I would spend 55 minutes determining the proper question to ask, because once I know the proper question, I could solve the problem in less than 5 minutes”.

Another valuable way to open the frame when you are solving a problem is to ask questions that start with “why?”.

In this example by Teena Seelig quoting Michael Barry: (2)

If I asked you to build a bridge for me, you could go off and build a bridge. Or you could come back to me with another question: “Why do you need a bridge?” I would likely tell you that i need a bridge to get to the other side of a river. Aha! This response opens up the frame of possible solutions. There are clearly many ways to get across a river besides using a bridge. You could dig a tunnel, take a ferry, paddle a canoe, use a zip line, or fly a hot-air balloon, to name a few.

You can open the frame even farther by asking why I want to get to the other side of the river. Imagine I told you that I work on the other side. This, again, provides valuable information and broadens the range of possible solutions even more. There are probably viable ways for me to earn a living without ever going across the river.

The 5 whys

The 5 Whys is a technique used in the Six Sigma methodology, which Toyota used with devastating affect against Detroit’s carmakers (Toyota’s profits in March 2003 were larger than GM, Ford, and Chrysler combined). (3)

For example: (4)

Problem Statement: You are on your way home from work and your car stops in the middle of the road.

  1. Why did your car stop?
    – Because it ran out of petrol.
  2. Why did it run out of petrol?
    – Because I didn’t buy any petrol on my way to work.
  3. Why didn’t you buy any petrol this morning?
    – Because I didn’t have any money.
  4. Why didn’t you have any money?
    – Because I lost it all last night in a poker game.
  5. Why did you lose your money in last night’s poker game?
    – Because I’m not very good at “bluffing” when I don’t have a good hand.

The final ‘Why’ leads to a root cause that allows you to take appropriate action. You could take a gamble on the 4th ‘Why’ by calling the gambling hotline, or go one level deeper and take lessons from an expert on bluffing. Whatever floats your boat.

Once again, kids can show us

Perhaps children with their insistent whys and are-we-there-yets have a lesson to teach us. If you asked a class of kindergarten children if they could draw, everyone would put up the hand. They just framed the problem a little differently. Such a pity we lose that natural skill as we grow up. But, like a bicycle, it’s easy to get the skill back – just ask why.

1. D Senor, S Singer. Start-Up Nation. Twelve, an imprint of Grand Central Publishing, Hatchet Book Group, New York. 2011.
2. Tina Seelig. How reframing a problem unlocks innovation.
3. KnowWare International, Inc.
4. iSix Sigma Dictionary.

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Head lice, goalies, World War 2 and bad ads

For the residents of the Hebrides (a chain of islands north of Scotland), if you had head lice you were healthy. There was ample proof: if the lice left their host, fever would follow. So, to get rid of the fever, all they did was put lice back in their hair. (1) Don’t knock it till you’ve tried it – it worked. However this is a wonderful example of false causality – simply the muddling of cause and effect. (2)

When the lice left the patient, it was because of the fever – they don’t like their feet to get hot, so they leave. When the fever broke, they moved back in. However, I wouldn’t tell them – people feel more positive when they feel they have some control over what happens in their life. (3)

Shame on Alan Greenspan

In the 90’s the entire financial community in the USA (or the honest ones left) revered the head of the Federal Reserve, Alan Greenspan. He had a magical aura about him – everyone believed that their monetary policy, under his guidance, was keeping the country on the road to prosperity. He wasn’t – it was China’s eagerness to buy US debt that played the major role. He was just lucky. False causality at work. (1)
When the advertising doesn’t work, first determine if there’s false causality – I have sometimes discovered that the wholesaler screwed up and there was no product on shelf to begin with! I did went to tell on them so me not get punished.

Holy goalie

Another bias we fall prey to is the action bias – to do something even if it achieves nothing. For example, soccer penalties are relatively evenly distributed to the left, the middle and the right of goal. However, although the odds are somewhat equal for all three, goalies dive to the left or right over 90% of the time. They do this because of the action bias: the feeling (or appearance) that at least doing something has some influence over the outcome. (4)
This is what we do when we feel that client needs to see us doing something for their money. The good old Brand Review doesn’t always add value. Sometimes just a chat would do.

The power of propaganda

Although not really a bias in our thinking, the sleeper effect explains why ridiculous you’re-so-obviously-trying-to-sell-me-something advertising works. During World War 2, the war department in the US spent so much money on propaganda films that they decided it was probably a good idea to see if it worked. The initial findings suggested that would have been better off investing in real stuff like tanks or Playboy magazines for the men at the front. Even if the content was substantiated (or reasonable), it was immediately dismissed, because it was seen for what it was – propaganda.

However, nine weeks later the whole story changed. They measured the soldier’s attitude a second time and found that those who had seen the movie were much more gung-ho than those who had not. The movies worked after all. (1)

We get bad ads, because they have value

So, here’s the bottom line of why bad ads work (or the best explanation so far): The source of the argument fades faster than the argument itself. In other words, we forget that the message entered our brain from a clumsy TV ad that we knew was trying to persuade us to do something in in the interest of the advertiser – not necessarily in our best interests. However, the message itself sticks long after the source fades. So when we walk down the aisle we truly do choose the washing powder that we were told is better than ‘the standard’ one.

I’m not advocating bad ‘product, feature & price’ advertising; what I am saying is don’t get so upset when you see it, it actually does work. Loerie or no Loerie.

1. R Dobelli. The art of thinking clearly. (Publisher: Sceptre, Hodder & Stoughton Ltd, London, 2013).
2. Hans-Hermann Dubben, Hans-Peter Beck-Bornholdt, Der Hund, der Eier legt: Erkennen von Fehlinformation durch Querdenken. (Publisher: Reinbek: Rororo, 2006). Sorry, only in German. Thank heavens for Google Translate.
3: I forgot, but it is referenced in plenty places. Incidentally it has also been shown that having no control of your work environment is one of the principle causes of work stress. An areshole boss can kill you faster than smoking. Leave now.
4. Bar-Eli M, Azar OH (2009) Penalty kicks in soccer: an empirical analysis of shooting strategies and goalkeepers preferences. Soccer & Society, 10:183-191.

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Forget bar graphs - today it's all about sparklines

With the awesome power of sparklines, you can condense 20 PowerPoint slides into one. And what’s more, Excel 2010 can do it for you. An example will follow.
But that’s not all – nothing breaks up a story like the disruptive ‘Refer to Table 1’, and with sparklines a few years’ worth of data can be illustrated within a sentence. The result is that the reader is not burdened with the frequent tabelis interruptus in your document.

The father of sparklines is Edward Tufte, who has made a substantial contribution to the art of presenting data in its most consumable form.

A bloody example

As controlling blood glucose is one of the country’s most pressing needs, let’s use this as an example. The normal range is 4 – 6.5.

We could test a patient’s level today and come up with a result that would  be noted simply as: Glucose 5. Everything looks good and we would send the patient on their way with the news that they have a healthy glucose level.

However, if we take the last 20 readings and illustrate that with a sparkline, we get something like this, which alludes to the fact that their level might be normal today, but has been erratic over the measured period. 

Glucose 5

We can make it a little clearer when we show the latest reading as a data point:

Glucose 5

However, that tells us little of the extremes, so we put in a grey band to show the normal range:

Glucose 5

If we’re interested in the frequency of cases outside the normal range (which we should be), then this sparkline works admirably. So there you have it, I can report that this patient has a normal glucose level today, however there have been three instances of hyperglycaemia (above the norm) and two cases of hypoglycaemia (below the norm), so we need to make a plan.

Very applicable to business

Although also used extensively for economic data (showing trends over time), the general business applications are as plentiful as the amount of see Table x’s.

As an example, if we wanted a picture of sales figures for the year, sparklines tell a much better story than just the current month’s data. (See Table 1 below :-) ). (1)

The above clearly shows that ‘electronics’ is a major problem. But we also get the whole enchilada on one slide (and that the electronics department better pull up its socks).

So, next time you’re on your 20th bar graph. Stop. Just use the sparkline feature and head off to a real bar. The sparkline feature can be found under ‘Insert’ in Excel 2010. Somewhat hidden, but in the middle of the insert menu bar here:

Ref 1: Diego M. Oppenheimer. Sparklines in Excel. Series constructed by Sam Radakovitz.

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