Recently, a lot of my time has been taken up writing ‘Brand Therapy 2’, the new edition of my book about tools and techniques for creating and executing strategy in pharmaceutical and medical technology markets. I’ve been encouraged and fascinated by the feedback to the first edition, especially readers who have said what they found most useful.
Strikingly, almost everybody comments on the closing section of each chapter, which gives pragmatic advice on how to avoid the most common mistakes when brand planning. And one reader, who takes a surprising amount of interest in my research, asked how these strategising screw-ups fit with my application of Darwinian evolution to the industry. Flattered by her interest, I wrote her an explanation that, I hope, will be useful to you too.
The strategising San
It’s hard to think of two more different environments than an air-conditioned meeting room and the hot, semi-arid savanna of the Kalahari. Yet the natural habitats of a brand team and the San (hunter-gatherer people of southern Africa) are both populated by the same species, Homo sapiens, trying to make a living in their different ways. And anthropologists who study the San report a degree of analysis, rationality and collective planning that would put some brand teams to shame. Unencumbered by spreadsheets and data sets, they are remarkably effective at what marketers would call situational analysis, strategic planning and operational execution. They are also remarkably good at something analogous to cross-functional team working. What this tells us is that our species is evolved to think strategically, our palaeolithic environment selected for strategic thinking, so in one sense it’s surprising that some brand teams are both inefficient and ineffective at creating strong strategies.
System 1, system 2
If we evolved to strategise, there must be an explanation for the mistakes brand teams make and that explanation, fully understood, should help us to become better at strategising. In my research, I look for patterns and similarities in brand teams’ strategising behaviour and, sure enough, they are there to be seen. To a large degree, the weaknesses of brand strategy can be traced to flawed thinking, especially cognitive biases such as availability heuristics and confirmation biases. And these flaws are best understood in evolutionary terms. Kahneman and Tversky, in their Nobel prize-winning work, discovered that we have evolved two different but complementary thinking systems. System 1 is fast, instinctive and well-adapted to getting away from predators. System 2 is slow, deliberative and well-adapted to longer-term goals. The problem for brand teams comes when we let our bias-ridden system 1 have too much influence on our strategising, which really needs our best system 2 thinking.
Workmen’s tools
I see system 1 thinking in brand planning all the time. Teams mistakenly use patient categories in place of segments because category data is more easily available than insight into patients’ implicit needs. They erroneously assume that key opinion leaders are innovative because they are experts, an example of the ‘halo effect’ cognitive bias. The funny thing is that teams do this even when using the textbook strategic planning tools that are meant to correct for system 1 and encourage system 2. They use Porter’s 5 Forces but still ‘frame’ competitive pressure only in terms of direct rivalry. They use Value Proposition Canvas but still do what they were going to do anyway, a form of hindsight bias. They use PEST (or PESTLE or SLEPT) analysis but it doesn’t work because it’s applied with huge amounts of attentional bias. But like the old aphorism about a bad workman blaming his tools, it’s not the tools that are at fault here.
Slowing down
So if it’s our instinct to escape predators that is messing up our strategising, what’s the practical implication for how brand teams can get better? When I observe effective strategists, I can see that, unsurprisingly, Kahneman and Tversky were right – system 2 works better. And I can also see that the tools work, in that they force system 1 to disengage and system 2 to take over. But only if they are used correctly and often they are not. The answer then lies in people and processes. Effective brand teams prioritise training their people well, building rigorous processes and sticking to them. Less effective teams don’t know the science of strategic planning, or don’t have the skills to apply it, or don’t have the motivation to do so. Or sometimes all three. And, interestingly, these issues are exacerbated by superficial training sessions and simplistic strategic planning templates. These quick fixes don’t solve the problem but instead create another. They lead brand strategists to have false confidence in their abilities and to think they know more than they do. This is a textbook example of another cognitive bias, the famous Dunning-Kruger effect. By contrast, exemplary companies prioritise strategising expertise, which involves using the tools correctly and, consequently, thinking slowly. And of course, the more slowly they think, the faster and better they act.
This column appeared in the April edition of PME. Read the full issue here.