I’ve always had an interest in psychology and its role in business strategy. There is a phenomenon in psychology known as “projection,” which deals with people’s tendency to project their own ideas and feelings onto others. Projection is something I think most people have experienced in relationships, but in my years as a business consultant, I found it to be a rampant cause of failed business models.
The reason that projection often leads to less than optimal performance—or even failure—is because we tend to create models that satisfy what works for us—rather than base a business model upon objective research. If what works for us happens to be what most people want, then there is a good chance of success. But if what we think will work happens to be relevant only to ourselves and a small group of people, there can be a big miss.
These kinds of misses—or failures—happen not only in small businesses, but also in the very biggest businesses . . . just look at Microsoft® and their numerous failed operating systems and Office versions. Remember Clippy? Seriously, whose brilliant idea was that? Clippy was supposed to help, but it ended up being a total nuisance that insulted your intelligence time and time again. Did Microsoft really think that most people wanted that?
Asian technology behemoths have failed to realize that their instruction manuals are about as useful to Westerners as hieroglyphics. German car manufacturers have failed to realize that Americans drink coffee and soda in their cars and need better cup holders. Fashion designers have failed to realize that most women want to be able to purchase certain classics every season. Restaurants have failed to realize that when children turn 11 or 12, they haven’t necessarily earned an adult meal ticket, nor do they usually want one. Computer programmers used to think that their interfaces were perfectly intelligible, when in reality, most people had no idea what they were supposed to do (this problem has mostly been corrected with the advent of user interface designers).
An ingenious business model is often one that simply recognizes what isn’t working for most people and fixes it. Starbucks® is a good example . . . they recognized that the less expensive Robusta coffee beans being used throughout America were producing a decrease in overall coffee consumption and that coffee was losing market share to soda over the course of generations. So they began making coffee drinks of European quality . . . using the more tasty and expensive Arabica beans. Soon the entire industry started using the better beans, and coffee consumption went up—with Starbucks getting the brand recognition for being the leader in premium coffee.
If you want to move the needle on your business, you could likely benefit from doing both customer and market research. This can be as simple as keeping up with industry trends and asking people what they like and dislike about your business . . . or having comment cards that facilitate this function for you. It’s also beneficial to encourage a transparent work culture where your employees feel encouraged to share their feedback. Tapping your friends and family members can also provide you with valuable insights.
If you recognize that it’s simply human nature to get absorbed in your own creations, then you can take steps to prevent the phenomenon known in corporate culture as “drinking the Kool-Aid®” . . . or even worse . . . “eating your own dog food.” Despite your best intentions, this is simply what happens when you live and breathe in a particular business environment every day. To keep your business fresh and relevant, try to get out and away from your business from time to time and see what other businesses are doing—don’t be afraid to check out your competitors. If you build in a plan to improve your business based on ongoing feedback and research—you may find that even the smallest changes will have a big impact on your bottom line.
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