Month: March 2018

The three most important concepts of strategy?

/ Paul Christopher Walton / Leave a comment

The author visits MIT, meets Arnaldo Hax but lives to tell the tale!

The Power of Three (TP3) is one of the most popular rhetorical devices in use by public speakers today. Psychologists tell us there is something magical in the rhythm of three connected strands that helps audience understand and recall the core message. Somehow I came, I saw, I conquered has a better narrative ring than I came, I saw, I conquered, I put it up for sale.

Revolutionaries have always known that TP3 is a brilliant way of summarising a complex manifesto. Visit France and note just how many times you will see Liberté, Egalité, Fratenité carved into the fabric of every town and village.

Admen love copywriting TP3 inspired slogans: how many of us were brought up knowing that a Mars a day helps you work, rest and play? Or can you taste the difference in snap, crackle and pop? I’m lovin’ it.

And above all leaders who want to sell us their vision can’t resist punctuating their speeches with TP3 sound-bite triplets like blood, sweat and tears or yes, we can!

Perhaps this is why one of my favourite strategy teachers deployed TP3 extensively against the business big shots he regularly came up against.

In the mid 1990s, I was a bit part player in a Unilever epic about new sources of growth and upgrading the strategic planning skills of its senior team was identified as one key enabler. Already working with a variety of Unilever’s operating companies on brand and innovation projects, I suddenly found myself being drawn like an asteroid into the powerful orbit of Arnaldo Hax , the Sloan Professor of Management at MIT, in Cambridge MA.

Arnaldo Hax is a charming Chilean with a razor sharp mind and an irresistible wit to match, and was the perfect choice for the job of building a framework and set of tools for improving strategic thinking in Unilever. At that point, Unilever was trying to modernise fast and was on the lookout for more joined-up sources of competitive advantage it liked to refer to as Unileverage.

Arnaldo’s shtick was perfect because it involved the combination of hard-core process discipline (mission, opportunities, competencies, principles, thrusts, actions and so on) with generous amounts of hilarious observational stand-up.

‘You have some very interesting work cut out for you now’, he said to one group who had failed to impress him with their homework. To another poor performing syndicate who said they had just finished brainstorming their response, he replied ‘In my experience, brainstorming usually involves a lot of storm, and very little brain.’

There was one group I remember in particular which consisted of extremely strident business unit leaders whose time in the breakout session had been spent largely in positioning and posturing rather than actually doing any work who were told in the plenary session: ‘I am sure you have more intelligence in your group than you have written on your charts.’

Arnaldo was an adept at understanding the psychology of his audience and knew how to sell a rigorous soup to nuts process with just the right amount of playful banter to keep the grumpy VIPs attentive and on-board.

But beyond the lecture room sizzle, there was plenty of content sausage to appreciate. His approach always put the customer at the centre of the strategic universe: ‘The essence of competitive positioning’ he told us, ‘is to attract, satisfy and retain customers’. He also recognised the increasingly important challenge of solving protecting differential advantages. Here, he preached the doctrine of system lock–inwhich he explained involved identifying strong functional as well as emotional mechanisms to control and maintain customer fidelity. Today, we would recognise the Apple brandworld as a defining manifestation of this principle.

Arnaldo was also a power user of TP3. On one occasion, he teased the Unilever strategic élite with a question: ‘What do you think are the three most important rules of strategy?’ Not surprisingly, this provoked all manner of answers, some predictable and many pretentious, the latter to be categorised as the latest thoughts of the Senior Vice President of Mumbo Jumbo.

But for Arnaldo, the arch exponent of focus and specificity, the three most important concepts of strategy were in fact: segmentation, segmentation, segmentation.

According to him, the paramount task for any business was to decide where exactly it would choose to compete. So segment, segment, segment became the first, and arguably most important of all what became known as Arnaldo’s Haxioms.

In the fading orange glow of those Fall days at MIT, there was plenty to harvest from my masterclass with Arnaldo. Of course, there were those who said there was too much process in Hax and too many templates to fill in (and there was a torrent of templates), but for those who listened attentively to the top notes of his score, there was also a stirring right brain theme that has certainly stayed with me:

‘Planning without measurement is just poetry.

But planning without poetry is just measurement.

Cha-Cha-Cha!’

 

The Early History of Quorn

/ Paul Christopher Walton / Leave a comment

How The Value Engineers helped bring the first new food to the world since yoghurt

Breakthroughs are notoriously difficult to bring to market, especially when they involve something simultaneously as basic and yet as culturally significant as food.

But such was the challenge The Value Engineers inherited when it was approached in the early 1980s by a small science start-up in High Wycombe that was funded by two food industry giants: RHM and ICI.

The story had begun 20 years earlier when Lord Rank, convinced that the world was hurtling into a crisis of food supply, tasked his Ph.D.’s with the search for alternative and more nutritionally balanced sources of protein.

Having scoured five continents, it was perhaps ironic that they discovered exactly what they were looking for in a field in Marlow, not very far from their lab in High Wycombe.

It was a tiny plant and because of its microscopic size, they decided to call it myco-protein, and they spent the next 20 years researching its properties and assessing its suitability as a novel food. Myco-protein, when grown and harvested, has the bite and fibrosity of meat but without any of the negative nutritional complications that were becoming the subject of increasing health concerns in the 1980s. It was also an exceptional carrier of flavour. This made myco-protein a first-rate choice as an alternative to meat, especially beef.

After extensive consumer clinical trials, followed by food standards clearance and product development that included partnering with some of the U.K.’s biggest names, myco-protein was soon doing the rounds of the food trade and NPD conferences, describing itself as a Tomorrow’s World next big thing.

If only it was all that easy. Following on from the the disastrous failure of new smoking materials in the 1970s and the frankly indifferent success of soya, the trade proved to be a little sceptical of this new test-tube food. It appeared to be another one of those technologies in search of a market.

By 1983, and having already invested tens of millions of pounds, the main board of RHM showed signs of losing patience. Accordingly, and with a slight air of double or quits, they formed a joint-venture with the bio products division of ICI. Its goal was to build a pilot plant with a small capacity to prove (or otherwise) the existence of real consumer demand for myco-protein. A small executive team was formed to run a budget, make investment decisions and give myco-protein its final commercial chance.

At this point, the TVE founder partners were approached and were asked to pitch for some consultancy against the following essay question:

‘We have a new exciting food technology and a development budget of £1 million. What would you do with the money?’

In the somewhat Spartan accommodation of the Nissen hut where the start-up was based, we told the CEO that the two most important things to sort immediately were to acquire a good quality overhead projector and the best filter coffee machine money could buy, because in order to light the blue touch paper, they were going to be doing a lot late nights and a lot of presentations…

Thus, began the highly successful collaboration between The Value Engineers and what became known as Marlow Foods, together building the brand we all know today as Quorn. Incidentally, Quorn was originally going to be called Origen, but because of complex global naming and legal issues, it was decided to use an existing RHM asset, a regional sauce brand called Quorn, which was then only on sale in the Midlands.

Over the following 10 years Quorn and The Value Engineers grew and grew together.

TVE, acting as Marlow Foods’ primary marketing partner, provided strategic advice on positioning the basic raw material (“A distant relative of the mushroom family…the right food at the right time“), the identification of priority customer segments (J.Sainsbury, Unilever), the development of priority products (Supremes, pieces, sausages minced and even ice cream), all with the development of the appropriate brand architecture and personality.

Following Quorn’s successful launch in the UK in 1985, TVE went on to work with Marlow Foods on product launches in Belgium, the Netherlands and Germany, and created the innovation roadmap that paved the way for Quorn’s subsequent global development and later business success. Wal-Mart’s recent decision to list Quorn in 2000 US stores shows that what was once considered an unfamiliar niche has finally become part of the food mainstream.

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