At the end of the last segment in series, I opined that our industry needed to respond in creative and imaginative ways to the new market landscape, and that it would take "unswerving resolve" to do so effectively and successfuly.
But I also warned that I don’t have confidence in our ability to do that and promised to address why that’s so in this, the final installment.
Also in the last installment I spent some time discussing A. O. Lafley’s tenure as CEO of Procter & Gamble, and that was no coincidence. To be sure, I applauded Lafley’s embrace of innovation in an industry assumed to be mature and technologically placid—consumer packaged goods—but the fundamental reason I dwelt on P&G was that they compete in bruising consumer products categories where it’s almost impossible to eke out growth above that of the population. (This is also true of Colgate-Palmolive, Kraft, General Foods and General Mills, Anheuser-Busch, etc., etc.)
All these firms—which are as sophisticated and resourceful as they come in marketing—are in a ceaseless battle for market share. If you talk to people in the trenches at these firms and their marketing and advertising agencies (I have), you know that they track market share with the intensity of a day trader watching the price of an options position. If that’s a slight exaggeration, it is no exaggeration to say that market share matters as much as revenue or profits. And the reason is simple: To generate growth well above population trend, all these firms need to take market share away from their competitors. If Pampers (P&G) are to win, Huggies (Kimberly-Clark) must lose; it’s a zero-sum game.
Sound like heavy weather? Well, we had best get used to it.
More importantly, these firms have had decades to hone and fine-tune their strategy, and they have been immersed in market-share wrestling matches for decades and decades—the entire lives of most brand managers and product development specialists. They’re as good at this as it gets.
We don’t even think this way; we don’t want to think this way; and we have little clue where to begin if think this way we must.
Our problem is we don’t have decades to figure it out.
But that’s not our only problem, or even our biggest problem.
Not to channel Shakespeare, but our biggest fault lies within ourselves. In order to succeed in this new environment:
- We must fundamentally change the way we do things: we must, in other words, innovate;
- Innovation requires delving into the unknown;
- Exploring the unknown requires experimentation;
- Experimentation involves failure;
- And we cannot tolerate failure.
The last point—that we, being lawyers, cannot tolerate failure—is critical. All else is prelude.
Attend to exactly what I mean. I don’t mean we would prefer not to fail; or that all else being equal success beats failure; or that too long a string of failures marks a loser.
No, I mean something far stronger: We are built to critique, to second-guess, to demand accountability and assign culpability. If the gas can or the tires on the Concorde or the securities offering blows up, someone is responsible and someone is going to pay. They should have known better (because we certainly do). It’s their fault and they will be made to pay; justice will be done.
There’s a further dimension.