The Conscious Company
How the 4 Es can make companies better understand their present and avoid the fear of the future
Delivering the basics should be automatic, right? However, defining what are “the basics” in the corporate world is much more complex than are dreamt of in the philosophy of most managers. Than most managers assume. In many businesses, the “basics” are not exactly the physical product that is sold. Often, the “basics” that consumers expect are somewhat more complex. This cognitive dissonance about what is fundamental in a business-client relationship proves that, in the corporate universe, deliveries, functions and vocations are far more volatile than might seem at first sight. In other words, the consumer’s view of a brand is constantly changing and companies need to be prepared for this kind of dynamics.
Faced with such ongoing impermanence, it is even more crucial for managers and teams to keep in touch with the present in a positive, creative and conscious manner to be able to act decisively to maintain contact with the here and now, to preserve the connection with the their purpose and to advance towards the future with confidence. The only way to achieve the longevity that every company wants is precisely to open one’s eyes, see the present and meet the demands of today’s consumer, which may be very different from those that existed years ago.
One way to keep one’s feet firmly in the present is to reflect on the company’s ability to meet the 4 Es: Elegance, Efficiency, Eloquence, and Eminence that make up the Minimalist Strategy System. If teams are clear about the 4Es, they will certainly be attuned to the present and more prepared to deal with the future. However, a caveat is in place: When talking about the future, we mean the next quarter, the next three years, and also the next 30 years. Yes, contemplating the different faces of the future can be as scary as realizing its enormity and importance. Awareness of the future is indeed shocking, but it must never be greater than the importance of the present.
Many companies are so worried about preparing for the future that they forget to live the present, to do what needs to be done right away. They often follow the fad of wanting to innovate forever, and end up forgetting to deliver the basics, which is what their consumers expect from them. The issue is that what consumers expect from a brand doesn’t always correspond to the actual physical product the company delivers. This mismatch between customer expectations and investments in purported innovation often compromises the financial results of a company – and the damage may take on many different forms. It could be a small drop in sales, a slight devaluation of the brand or it might even fully compromise the future of a company.
In the late 2000s – say, in 2007 or 2008 – Blockbuster executives were more concerned with finding the best locations for their video rental stores than developing ways to deliver videos by download. Meanwhile, Netflix was investing in download technology and exclusive programming. In 2012, Blockbuster no longer existed. Concern for the future is perfectly understandable; what is a mystery is the inability of certain teams to see the obvious about the evolution of their own business.
It is important to note that the unbridled – and often misguided – pursuit of innovation has created endemic suffering in the corporate world. Uncertainties regarding the future torture leaders and derail teams – or, even worse, disorient leaders and torment teams. The cure for the pains of innovation involves self-knowledge and the search for greater wisdom within companies. Thus, the challenge becomes how to acquire self-knowledge and wisdom.
One way may be to apply mindfulness techniques in the corporate world. This set of psychological techniques and processes aimed at guiding one’s attention to the present moment is quite effective in producing greater self-knowledge and promoting wisdom. And they can – or, rather, should – be applied in the corporate milieu. After all, only by knowing its strengths and weaknesses can the team find the best evolutionary path.
As Michael Porter points out, it is critical that companies understand the objective forces that affect their business: 1. the intensity of rivalry among competitors; 2. the power of suppliers; 3. the power of buyers; 4. the threat of substitut5es; and 5. the threat of new entrants. It should be noticed that all these threats that Porter mention are external to the company. Identifying and managing them is critical. But it’s just part of the challenge.
Imagine that your company is a team in a championship. In this context, Porter’s forces involve everything that happens outside the locker room – who the other team is, in what field one is playing, the quality of the turf, the particular style of the referee, and even the position of the team in the schedule of the league. On the other hand, the study of the 4 Es and the mindfulness techniques are what take place within the locker room. The team knows what it want and has developed it’s game style (Elegance); has trained a lot and is in excellent physical shape (Efficiency); has developed moves that take full advantage of its best talents (Eloquence); and is motivated by its previous results (Eminence). However, in addition to practicing the 4Es, the team needs to be fully attuned to the specificities of the day of the match. It must be aware of the physical condition of each element, understand the incidence of light in the stadium, the temperature, the humidity. It must grasp how every detail of the present moment can affect its performance that day. And this is achieve with mindfulness techniques.
The process of envisioning the present in a company comprises five stages.
- Form. Observe and map the departments of your company, analyze how they connect and how energy, work and communication flow from one to another. Continuing with the football team analogy, this means that each player understands and becomes aware of their role in the squad. Depending on what the coach determines, each player’s performance may be more offensive or more defensive, more creative or more conservative.
- Sensations. Feel the impacts of the results – whether good, mediocre or poor. Be alert, for often good results lead to complacency. Inversely, a bad result can trigger a desire for victory. In team sports, this is very easy to notice. When the rehearsed plays don’t work or a star player is not having a good day, the team feels. Some can adjust, others get lost. That was what happened when Brazil was eliminated in the 2014 World Cup by losing to Germany with the traumatizing score of 7 to 1. On the Germany’s side, everything was like clockwork; on the Brazilian side, the unbalance was paralyzing.
- Perceptions. Stay tuned. We are often deceived by our own perceptions. By practicing mindfulness, concentration, and soul-gazing we discover new dimensions of reality and can understand the mistakes we tend to make when addressing problems. Good teams adjust quickly to changes that occur during the game.
- Mental formations. This is the moment to accept realities, understand problems, seek solutions and be creative. It is important both when the score is favorable and when the team is losing. If the score changes, the well-trained teams become more defensive and/or set off in a counterattack.
- Consciousness. This is the time for critical vision, for understanding the impacts of the solutions and actions taken. It should be notices that this implies observing the moment and taking a picture of it. This is the time to be strategic, to use perceptions and mental formations to guide actions. If the players have sharpened their perceptions, they’ll use the weariness of the opposing defense in their favor or seek to neutralize their players.
In order to carry out these five steps and to feel what is happening in real time in the company and in the marketplace, we must count on the collaboration of the professionals. We must act in synergy, and this requires that communication be encouraged. Nothing can be exclusively top-down. Each professional and each leader must stop and look at their processes and understand which are the most important inputs, what causes anxiousness, what may be creating stress, and also recognize what is motivating their own performance and that of their team . By listening to what the present moment is saying it becomes possible to take immediate action. This helps to close energy leaks and prevent other day-to-day pitfalls. However, a state of mindful awareness is even more useful in moments when creativity is on an upward curve. Realizing this is key because it allows you to stimulate your team’s talents to give the best of themselves.
Focusing the present and avoiding uncomfortable judgments is quite an exercise. It requires sincerity and discipline. We are taught to justify mistakes, to cover up weaknesses and to overestimate our victories. A champion climbs on the podium, raises his glass and pops a bottle of champagne as if he was far superior to the athlete who came second. Most of the time, however, the superiority is not that great. Usually the difference is minimal, no more than a detail. It may be a few milliseconds, a better placed ball or some other detail that does not translate into a noticeable difference between a winner and a loser. It is in such situations that attention to the present is key. Being fully aware of the present moment is what will prevent the winner from relaxing his/her training and lose in the next contest. After all, the most likely is that he has lost by very, very little – one additional point or a few thousandths of a second less.
Evaluating the present and expanding your awareness of the reality of your company is a process that requires open and serene mind. The first thing to be considered is that what the company actually delivers is not always the product or service described in its articles of incorporation. The industry of which the company is physically a part doesn’t always correspond to the business it is in. Thus, the “basics” the consumer expects from it can be quite different and not at all obvious.
For example, officially Coca-Cola is in the soft drinks business. However, when we take into account its brand perception among consumers, the delivery they expect from company has more to do with lifestyle than with sweetened carbonated water. For most people, the Coca-Cola brand, which was fourth ranked among the most valued brands of 2017 according to Interbrand, represents fun, self-indulgence and an agreeable package of emotional childhood memories. Thus, although product is not among those deemed healthy by consumers, this takes second place to the their emotional needs. This assessment saves the brand, but in corporate terms it does not guarantee the future. So, for over a decade, the Coca-Cola Company has invested in purchasing brands of bottled water, soda and tea that are considered healthier products. That is knowing how to use the present in one’s favor.
For a distracted observer, Zara, the leading brand of Inditex, the world’s largest clothing retailer, is just one fashion store. If you look closely, however, and with an open mind, you’ll realize that the true sales engine is the desire of consumers stressed out by “feminine empowerment” to grant themselves a reward for their two-shift workday. The articles sold in its stores are not utilitarian; what is being marketed is the autonomy of women, the possibility of buying new clothes directly from the catwalks, as it were. Zara’s consumers are not in the front row of the fashion shows, but wants to wear the latest trends or pieces similar to those debuted there only a few weeks earlier. They know that that famous brand model was copied, but they want to feel the pleasure of having access to a world previously forbidden to them. In this sense, the “unconquerable” fashion world of catwalks clearly parallels the “unconquerable” corporate universe. There is an almost subversive sense of heroism about it. It is as if the working woman said that, yes, she can be part of the same universe of the privileged women who attend the shows and purchase designer clothes. As long as it continues to steal fire from the gods, or rather the goddesses’ garments, the brand will retain its relevance to consumers. Thanks to this, the brand had an 11% appreciation between 2016 and 2017, according to Interbrand. A broad view of the company’s strategies shows that the magic of the brand lies in continuing to quickly offering fashionable pieces similar to those in in fashion weeks. Therefore, there would be no point in attempting to evolve and offer 100% original creations. The compass that guides the brand’s path points toward investing in agility rather than originality and, thus, to continually refining its logistics processes and its perception of the consumer’s mind. Generation Z women, for instance, are less eager to consume and value catwalk launches less than principles of sustainability and applied ethics in the production chain of the clothing they wear. This shows how attention to the here and now can bring very different – and, to some extent, conflicting – information.
Apple, the most valuable brand in Interbrand’s 2017 ranking, does not only make computers or smartphones; it offers the feeling of belonging to an elite of forward-looking consumers. This is a reality today and has been since Steve Jobs retook the company in 1997. However, this rebellious, iconoclastic and far-out aura has stronger appeal to Baby Boomers and Generations X and Y than to the younger Generation Z , for whom a sense of avant-garde is their default mode and does not represent a differential. For those born in a broadband world, what matters is price and usability. That is why the Apple brand showed only a 3% appreciation last year, while competitor Samsung appreciated 6% and is today the 6th most valuable brand in the world.
The Interbrand ranking reveals trends that deserve analysis. For example, Amazon currently ranks number 5, up 29%. What explains such appreciation? Perhaps the fact that Amazon put the 4Es masterly into practice. It’s elegant because it puts customer experiences and preferences first. It’s efficient because its algorithms make its suggestions are the most relevant and also because its logistics process allows the deliveries to happen with agility and correction. It’s eloquent because its actions speak louder than anything the advertising media might say – the experience of their consumers is discussed during coffee breaks, in family conversations and, of course, in the social networks. And, with regard to success, it is a company that is incessantly looking for new ways to be present and relevant to its customers – even though it is already the segment leader. In fact, the company has begun choosing cultural products to sponsor and, thus, give its profits a noble destination, consistent with its history. One example was co-producing Woody Allen’s film, Wonder Wheel.
But perhaps the clearest way to show the need for a company to connect with the present is to go beyond analyzing success and scrutinize the reasons of some resounding failures of the past few decades.
Several humungous transnational companies with well-accredited marketing, sales, and R&D departments disappeared because they were unable to correctly interpret signs of the present. They did not clearly perceive the impacts of the marketplace. They did not understand the rain they were getting wet under.
The list is huge. And includes several 20th century giants – Olivetti, Pam Am, Kodak, Nokia and several others from various industries. It is ironic that, while some of these companies disintegrated, the products they offered were becoming increasingly popular and accessible. Never was there so much typing as when typewriters became keyboards. Once reserved only for ablest professionals who could focus properly and keep a steady hand, photography spread widely. Today, thanks to the ease of smartphones, recording images is within everyone’s reach.
Several businesses that were large in the 20th century got even bigger in the 21st , but based on other premises.
Some companies, such as Blockbuster, realized at one point that their business model was doomed and, as much as possible, negotiated their own end. As the international film-rental giant negotiated their stores and fired employees, movie fans consumed films with increasing voraciousness. Streaming and broadband technologies expanded access and enabled people to watch content on a variety of screens. Blockbuster acted as a surfer who is knocked off the wave, struggled to emerge and reach the beach alive. It was wrong in its vision of the future, but when it realized it was being swallowed, it acted quickly.
Another example of gradual but inexorable change occurred in the taxi market. Today there are more people using cars driven by others, but within the logic of the apps. The business model of taxi drivers did not disappear with the arrival of the applications, but it changed radically.
How to remain in the saddle in the face of change? The answer is balance. Balance emerges from self-knowledge. As Porter would say, knowing your strengths and weaknesses well is the first step to begin to envisage a solution.
Among the lessons that mindfulness techniques teaches us is that reality, the present, should not cause concern. It should, however, give rise to an occupation process guided by the 4 Es. Perceiving the present reality is quite an occupation in itself and, if this perception is aligned with the principles of Elegance, Efficiency, Eloquence and Eminence, it will draw the relevant innovation map. A good example of this is probably in your pocket. When Steve Jobs realized that people were carried their phone in one pocket, the iPod in another and the camera in a third one, he understood that it was time to bring the three gadgets together. That is how the idea of the iPhone came about, revolutionizing the market in 2007. Here is an example of innovation born of awareness, not anxiousness, and was therefore accepted by the consumer immediately and enthusiastically.
Therefore, rather than seeking to be an innovative company, one must aim to be a company fully aware of the present.