Do you know the difference between a good strategy and a bad strategy? (Part II – Fluff)

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This post follows on and expands on the discussion started in the previous post: Do you know the difference between a good strategy and a bad strategy? (Part I)

Why is the business world full of fluff?

Business managers are under pressure: the old formulas simply don’t deliver the desired results; and more and more stuff is changing at what seems to be an ever increasing pace – it is difficult to keep up and make sense of what is going on.

Business managers do not have the time or the aptitude or the desire to think ‘the situation at hand’ through by themselves. Let’s face it original thinking is hard work – it is genuinely creative work. Take a good look and you will find the ability to think creatively has, long ago, been drained from most business manager (I am including Director in the label ‘manager’) and replaced with a full tank of ready-made frameworks and formulas? School starts this process and business school completes it.

There are a whole bunch of people whose standing and livelihood is based on fluff. They are experts at dressing up the ‘old and common’ so that it comes across as ‘new-insightful-innovative’ and selling this to business managers who are eager for the ‘latest silver bullet. Furthermore fluff elevates one’s standing as one comes across as being more insightful, more learned, more intelligent than the rest of us. If you want to get a great understanding of fluff then turn to academia and government – it if full of marvellous fluff.

What is fluff?

Richard Rumelt (“RR”) writes: “The hallmark of true expertise and insight is making a complex subject understandable. A hallmark of mediocrity and bad strategy is unnecessary complexity – a flurry of fluff masking an absence of substance.”

How does he describe fluff? His definition is: “Fluff is a superficial statement of the obvious combined with a general sprinkling of buzzwords. Fluff masquerades as expertise, thought and analysis.”

Examples of fluff?

In his book (Good Strategy, Bad Strategy) RR provides two excellent examples of fluff.

He shares a quote from a major retails banks internal strategy document: “Our fundamental strategy is one of customer-centric intermediation.” RR points out that the word “intermediation” means that the bank accepts deposits from one bunch of people and then lends that money to another bunch of people. That is to say it is bank! You might me thinking, like I did, that the key phrase is “customer-centric”. RR points out that “customer-centric” is the buzzword that happens to be in fashion right now. He admits that “customer-centric” could mean that the bank has committed to offering depositors and borrowers better terms, better service, a better experience. His review of the banks policies, products and practices shows no change from business as usual. On that basis RR concludes that that the phrase “customer-centric intermediation” is pure fluff. And on that basis one can rewrite that one sentence as: “Our fundamental strategy is being a bank.”

Here is another example of fluff: “..an elastic execution environment of resources involving multiple stakeholders and providing a metered service at multiple granularities for a specified level of quality of service.” Have you figured out what the author is talking about? It is the definition of cloud computing within a recent EU report. What is cloud computing? It is computing where you get on with the tasks that you need to get on with and someone else takes care of the IT infrastructure (applications, servers…) that makes it possible to do your tasks. And it just so happens that this infrastructure belongs to someone outside your company and you acccess it through the Internet. That doesn’t sound that sexy right?

What has fluff got to do with the Customer field?

The short answer is, a lot! Let’s start with “customer-centric”. I get that you have fallen madly, deeply, in love with the customer and so are committed to being “customer-centric”. Now tell me what that means specifically in terms of:

  • The Value Proposition – target market segment, needs/wants addressed, price charged;
  • The Customer Experience that your customers can expect;
  • The Value Chain – how you configure your value chain and execute the activities within the Value Chain to deliver the Value Proposition and the Customer Experience;
  • The Customer Charter – which spells out exactly what you expect from the customer and what the customer can expect from you
  • Guarantees & Penalties – what specifically do you guarantee the customer and what penalties will you pay (to the customer) if you do not live up to your end of the bargain as set out in the Customer Charter.

Having difficult spelling that out? Which is why I assert that “customer-centric” is 100% fluff for many if not most organisations who talk about being “customer-centric”.

If you think deeply enough about Customer Experience you will also find that in many cases, for many organisations, this is pure fluff. Don’t know what I mean? For the vast majority of organisations, Customer Experience = Customer Service. Going further, most of what I have seen labelled “Customer Strategy” has been pure fluff. Most “Customer Strategy” has been something like “we want to get more customers, keep more of our existing customers and do a better job of up-selling / x-selling to our existing customers.” Fantastic – that is about as useful as saying “the sun rises in the morning and falls in the afternoon” or that “Our fundamental strategy is being a bank”. Other excellent examples of fluff include “Social Business” and “Big Data”.

Republished with author's permission from original post.

Maz Iqbal
Independent
Experienced management consultant and customer strategist who has been grappling with 'customer-centric business' since early 1999.

6 COMMENTS

  1. Maz, another great post.

    I think you’re right, there’s a lot of fluff out there, both in what companies say about themselves and the claims that software vendors and consultants make.

    Strategy is one of the most abused terms, in my view. These days, it seems everything is a strategy. My favorite example is CRM, which some claim is a strategy (good for consulting biz) but most business people say is something you buy and implement (good for Salesforce.com). While it’s true you need a strategy (plan) to implement software, that doesn’t turn the software into a strategy, in my view.

    And you’re right that “customer-centric” is another vague term. It could mean anything from segmenting customers (so you can market to them more effectively) to living every day with customers in your heart. Like CRM and CEM, it’s popular but is mainly used as a buzzword, for marketing purposes.

    CEM is touted as a strategy, and like CRM it can/should be but often isn’t. I’m afraid that most companies still think CEM is:
    a. the new hot buzzword for good customer service or
    b) the new hot buzzword for automating touchpoints (what we used to call CRM)
    c) the new hot buzzword for surveys and listening to customers (what we used to call EFM)

    The thing is, if you got rid of fluff, what would marketers do for a living?

    Putting cynicism aside for a moment, there is value in all of these ideas. Buzzwords like CRM et al help them catch the market’s attention. Unfortunately, the bandwagon effect also ensures that most will strive to capitalize on the bandwagon without really understanding how it got started or where it’s going.

    Hey, maybe we need a strategy for that?!

  2. Hello Bob

    Thank you – I appreciate you taking the time to share your perspective.

    For my part, I find myself in violent agreement with you.

    I suppose where we disagree is that I am of the view that the value of any idea is the results (the impact that makes on the world, better, worse, no impact) on the ground. And from the perspective some of these ideas are harmful rather then helpful.

    If your focus is on improving the Customer Service function to answer calls promptly, close calls me quickly, reduce costs by cutting out ‘waste’ in customer service operations then why not call it what it is: improving performance in the Customer Service function. Why the heck call it Customer Experience? Why badge call centre quality managers (who are process enforcers) as Customer Experience managers?

    I look forward to hearing your view.

    Maz

  3. Maz, yes, there are a lot of fluffy titles to go with the fluffy buzzwords.

    Sometimes the titles are a signal that something has changed. For example, a company appoints a Chief Experience Officer to break down silo issues and improve the overall customer experience.

    Other times, it’s a type of grade inflation. Titles meant to make the organization look good or employees feel good. But little changes.

    What I’m saying is that there is value in the underlying ideas behind CRM, CEM etc. How companies choose to implement them is another matter. My research find that only 5-10% of companies become leaders, the rest muddle along and chase the buzzwords, wondering why their business doesn’t improve.

    Of course, whether these “strategies” work or not, a lot of software will be sold, and billable services provides, by the industries promoting the buzzwords.

    The truth is that few truly care about becoming customer-centric the way you describe in your 5 attributes. It looks too much like work! And the buzzword industry helpers mainly care about selling their wares. I’ve seen vendors (and consultants) shift their marketing in a blink when the one buzzword fades. A classic example is Social CRM for the past 3 years. Now CEM (or maybe, CXM) is the new positioning for many former CRM/SCRM vendors. And yet, the products and services are exactly the same!

  4. Hello Bob

    I get where you are coming from and the game as it is keeps many of players playing and some players incredibly wealthy. And in the game some of the players play full out and really enjoy the game.

    Where we differ – and it is OK to differ if you and I are standing on the ground called respect for each other – is in the concept of value. How I see it is that value ‘shows up in use’. Lets say I go to a lot of effort to make a baseball bat for you. I believe it will serve you well – as a baseball bat or say as a club. You take it and shove it the garage. Your forget about it. It sits in a box in the garage. I argue that there is no value in that baseball.

    If my understanding of Services Dominant Logic is correct then the point of view is that value does not reside in a concept, a product, a solution – it resides in the use made of that concept-product-solution. It is the user who creates value through use. The concept, the product, the solution is simply an artifact – like driftwood lying on the beach.

    When it comes to execution, I see my role is that of education and assistance. I see myself as a ‘midwife’ – I am there to advise and assist. However, it is not my baby and I am not the one that is giving birth or has to live with the baby. So, I might advise a client not to give birth at home. She may choose to do so. If I have spelled out the pros and cons of giving birth at home v hospital then I see it as having done my job. That is how I see my role in the whole Customer field.

    It is great entering into a conversation with you!

    Maz

  5. I need to read up more about SDL. This would make for a great discussion.

    For now, I’ll just say that as a lay person, yes of course there is value when I used something.

    But I also see value in something that I may use. For example, the tools in my garage, the car in the driveway or that gym membership.

    If the experience of using is not great, it may decrease the latent value, and motivate me to find another “solution.”

    Perhaps you could author a post on SDL and then we could engage our community on this? I think co-created value (in use) is an interesting idea, but have struggled to wrap my mind around what exactly it means, and how a business manager can use the idea.

  6. Hello Bob
    I thank you for your contribution to opening my eyes – latent value and that unused but ready at hand toolset.

    I have been doing quite a bit of work in the insurance sector recently. And after your sharing I got that when I take out insurance I get value even if I never use it. The value resides in the promise that I will get the help I need when I need it. That sounds like your toolset – it carries a promise that it will provide the service that you need when you need it.

    If I have correctly understood SD Logic then it does not explicity mention and address latent value or the promise of value being generated in the future. I will look into this more and when I have gotten to the bottom of it, i will write that post to share what I have gotten.

    Once again, I thank you for your contribution! It is great being in conversation with you. I am grateful you exist!

    Maz

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