By Karen Morris
I intended to write this article about a passion of mine: algorithmic-based predictive modeling variances in global supply chains.
But, it is the sultry gloaming of summer in the city and my city is New York, home of “Sex and the City” so, if you don’t mind, I think I would rather write about the S-word. Yes, you’ve guessed it……shoes.
Shoes matter (this is a universal truth). They particularly matter to me. Remember when Sex and the City’s protagonist Carrie Bradshaw is mugged and exclaims: “Please sir, you can take my Fendi baguette, you can take my ring and my watch, but don’t take my Manolo Blahniks”.
She was speaking a language I understand.
Ask anyone who knows me. I have been fortunate, frazzled and frustrated to have traveled the world in my career – and my shoes came with me. When it comes to shoes, I laugh in the face of excess baggage charges.
You see, I believe that as we embrace the many changes through our multi-faceted, iterative careers, we need a change of shoes. As we grow personally and professionally, life urges us to put on new shoes, literally and metaphorically. As leaders and innovators, we need something more – a range of shoes. The celebrated shoe designer, Christian Laboutin , likens a girl’s first pair of high heels to the rite of passage from girl to woman. Remember the shoes you wore at your wedding, on your first day at work, when you ran a marathon? Shoes commemorate transition and change. They have something, to say about innovation strategy and management too.
Our beloved Monsieur Laboutin tells his rite of passage story for a reason. It makes shoes matter more; it imbues shoes, his product, with meaning. Crafting a strategic narrative uses the socializing power of storytelling to inject meaning, relevance and purpose into your strategy in a way that can be immediately understood by all your stakeholders. When Laboutin the businessman and innovator set out to make his name synonymous with sexy, exquisitely expensive shoes, he probably did not have medieval Popes on his mind. Nonetheless, an analogy obtains between Papal power reinforcement strategies and market place and brand power reinforcement strategies.
How did Laboutin become “the” designer shoe in a surprisingly crowded marketplace of thousand dollar plus shoes, inspiring an eponymous single composed by Jennifer Lopez, a “Laboutin Barbie” and a Disney short. Yes, his designs, raw materials, craftsmanship, distribution and premium pricing were outstanding. But so are Manolo Blahnik’s, Christian Dior’s and Jimmy Choo’s. These albeit indispensable, determinants of best in class will not put you in a class of your own. He made the sole of the shoes, historically the unseen, least vital part, narrate his brand. He made the soles red.
This is innovation genius. The disruptive power of “just one change” lies in the inversion of conventional thinking about what matters and why. We typically classify product and service attributes, in this instance shoes, into those that matter from a utilitarian perspective……such as quality and durability….or , from an emotional perspective……design, elegance, fashion statement, unabashed sexiness. By going against the segment’s assumption that the sole is a utility and function play and making it instead the quintessential aspect of the offering, immense competitive thrust is delivered.
This, to adapt a culinary classic of my native Yorkshire, is Fish ‘N Shoes Thinking. Fish – because you swim upstream against the force of industry assumptions – and shoes, because, as already indubitably established, shoes are a better metaphor for strategic leadership than French fries. Fish ‘N Shoes Thinking abounds in businesses that demonstrate the “change one thing” strategy: Apple – put design above function. Whirlpool – it doesn’t have to be white, make the washing machine furniture. Macy’s – furniture “risk less” insurance, refund the insured their premium if no claim is made on the policy (“risk free” insurance oxymoronic to an insurer). Argyle Mines’ industrial grade brown diamonds, increase the price by a thousand per cent and create desire for the previously undesirable brown…now champagne, cognac, and hazel…rocks.
In these paradigms, the “one thing” becomes a great deal more than the sum of its sole part, which returns us conveniently to the red Laboutin sole, affectionately termed “Sammy red-bottoms”……
The litigiously hard-won intellectual property right protection of exclusive rights to the use of that red bottom color code (Pantone 18-1663 TPX) on shoes cemented the commercial advantage of Laboutin’s differentiator and created an impermeable barrier to entry.
The red soles then deliver value far beyond the aesthetic innovation; they go to work on brand promotion as “free” advertising. Marketing – I heard a Harvard business school professor quip – is the price you pay for not having a good enough product. We are accustomed to admiring utility brands whose functional excellence or brand ubiquity makes their brand inseparable from the product’s performance. Jacuzzi, Xerox, FedEx, Escalator, Hoover, Google, Kleenex.
In this case, the emotional ‘story’ of the luxury glamorous shoe renders the brand inseparable from the product and the product literally a walking promotion for the brand. The flashing red sole in turn becomes a unique value proposition to the consumer, a motive to purchase, a fashion and status statement, an advertisement of how expensive the shoes are. The historically unconsidered sole becomes the soul of the consumer experience (no more puns, I promise). And this is exquisitely commercial head over heels success, 3 years straight leading the Luxury Brand status Index, three years
Awarded Most Prestigious Women’ Shoes, and the “real” Carrie Bradshaw, fashion doyenne and trend setter par excellence Sarah Jessica Parker gets married in them. This is brand promotion money can buy, just not Laboutin Ltd.’s money since in a marketing Fish ‘n’ Shoes move contrary to luxury brand convention, Laboutin’s “ just one thing” is never to give his merchandise away for promotional gain…a practice the designer( disingenously ?) dismisses according to British Vogue as ‘unimaginative”.
As mentioned, this kind of “fish ‘n shoes” thinking about differentiation in a crowded marketplace is not limited to $4000 shoes. But since we’re on the topic of shoes…….I promised no puns….but I still love shoes….let’s look at another shoe-led business model innovation Zappos.
A parallel pattern emerges in the components of the strategy:
- Question conventional assumptions.
- Change one thing.
- Build a platform (not an intentional pun) around the innovation.
- Socialize the strategic story.
- Make the “product” integral to the buyer experience.
The Zappos story also begins with an inversion of the “rules”. Conventional thinking about call centers obsesses about cost and efficiency with emphases on control and consistency. US-situs call centers have had notoriously high turnover rates. We have all had dispiriting experiences trapped between the tyranny of the technology (press 73 if you would like your blood pressure to reach dizzying heights in frustration) and the disembodied and disengaged script reader on the phone.
This constipated experience is the antithesis of storied, connected, empathetic customer experience. But that’s call centers for you….and unlike books and sundry hardware, some things just don’t fit the on-line model because fit is important, shoes for example.
Zappos founder Nick Swinmurn and CEO, Tony Hsieh, did not conform to those assumptions. Swinmum’s vision to build a retail empire online began with the unlikely proposition of shoes. Like many bright ideas, it now seems obvious with 20/20 hindsight but on inception looked improbable, even to initial venture investor Hsieh. But if the shoe fits or is easily returnable, you can buy it on-line, and even in 1999, $400 million dollars’ worth of shoes were being ordered from mail order catalogues and that was a mere sliver of a then $40 billion dollar US market.
In this case, there was no actual change of shoes. Zappos shoe inventory replicates other online and physical store retailers. Zappos did not change the what but the how of its model. Product-centricity was supplanted by people-centricity. In its brief occasionally tumultuous ten year history before hitting over a billion dollars in sales and being acquired by the Goliath Amazon, Zappos had a number of Fish and Shoe moments, such as its decision to walk away from drop shipping, representing 25% of revenues and sorely needed cash-flow because control of customer experience necessitated control of inventory.
But the bold, transformational “change one thing” that excites me in this people matter as much as product story was their reinvention of the call center. Through a dramatic salmon upstream leap of faith and imagination, Zappos effectively repurposed the call center from servant of the organization’s efficiency and expense management to servant of customer experience.
Of course, for the one changed thing to have resonant and sustainable business impact the organizational ecosystem must be redesigned around it. Operationally and culturally, Zappos built the platform around its core idea. Thus it became a business in the business of exceptional, memorable customer experience. The then prototypical accoutrements of the call center – scripts, time restrictions, de minimis discretionary decision rights, hourly fungible impersonal staffing, key stroke counts, command and control – were booted out in favor of intensive training, trust and empowerment. The first step to customer centricity is often misunderstood as customer focus. I would like to stiletto that notion. The quintessential first focus if we seek differentiation in customer experience must be on the employee.
Recruitment training and retention methods and tools were reinvented to support the preeminence of customer experience. New recruits were paid during intensive training programs building skills to communicate with customers empathetically and authentically. All new hires to the company at every level and brooking no exceptions whatsoever were inducted into the customer-centric culture by working for an initial period in the call center. The story goes of a newly-appointed senior executive officer who was disinclined towards the immersive call center experience. The company was disinclined to continue the relationship.
The organization made cultural fit and shared values the defining characteristics of employees and created and sustained employee engagement as the sine qua non of the delivery of customer experience. Making the grade technically is irrelevant if the cultural dimension is lacking. After training, new hires are offered a 3,000 dollar “bonus” to quit.
Moreover, employees enjoy the benefits of the people-centric culture that they are accountable for sustaining quite literally as well as socially. Zappos offers free health care, lunches and vending machines and a library. However these are positioned as cultural rather than economic benefits.
Constant storytelling and exchange, and “goofing around” underscore the unique values and positioning of the company which publishes unedited its annual “Culture Book” an anthology of employee descriptions of the company’s culture. These are not ubiquitous traits of service center environments but as tony hsieh puts it they business of selling goods online but in the business of “Delivering Happiness” and their reputation suggests that they do.
So this fish ‘n shoe combination is an invitation to think differently and make the inquiries:
- What conventional assumptions can we invert?
- What one thing can we change?
- What platform can be built upon this innovation?
- How can we socialize our strategic story?
- How do we make our product the soul of the customer experience? (I may have broken the no-pun promise)
Finally, if cynicism still has you under its heel, remember Golda Meir’s advice about confrontation. Before you race to dispute someone with a different perspective than yours, walk a mile in their shoes. Then, if the dispute should materialize, you are a mile away and you have their shoes. And if you are really blessed, they will be your size and have red soles.
Karen A. Morris is a strategic advisor to national and multinational companies. She is formerly Chief Innovation Officer of Chartis Insurance, one of the world’s largest general insurance companies, Karen specializes in all aspects of innovation strategy and execution. She has over 25 years’ experience in law, management, underwriting and multinational business. This rich and diverse international background inspires her insight on product, service and business model innovation. She is a frequent speaker and writer on innovation and leadership at global forums and conferences around the world. Karen is co-founder and President of The Institute for Insurance Innovation launching in 2012. Karen is also an adjunct professor at Fordham University in New York teaching Innovation as part of the MBA program. She has spoken on innovation at the world’s foremost executive MBA program. You may contact Karen at email@example.com.