Your Corporate Culture: The Last Untapped Strategic Asset Of Your Organization

This is the latest article I’ve written for the Public Gaming Magazine, published in the August/September 2016 edition.

Lottery agencies face a unique set of business challenges which we’re all familiar with and trying to tackle on a daily basis. They include:

  • Player fatigue with big jackpots,
  • Difficulty identifying and reaching the next generation of players.
  • Rising operating expenses mean that each dollar of incremental growth comes at a higher cost
  • Cracking the code on successful digital engagement
  • Better utilizing digital throughout the POS experience

However, there is an even more important challenge most lottery agencies face and that directly influences the performance of their business. I am referring to an agency’s corporate culture, and the fundamental role it plays in driving innovation, growth, profits and employee satisfaction.

In fact, a lottery’s ability to tackle its business challenges is directly related to the strength of its corporate culture.

So, what exactly is a corporate culture?

When in doubt, we can start with Wikipedia:

Corporate Culture (or organizational culture as it is often referred to) represents the collective values, beliefs and principles of organizational members and is a product of such factors as history, product, market, technology, and strategy, type of employees, management style, and national culture. Culture includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits… Thus, organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. In addition, organizational culture may affect how much employees identify with an organization (Source: Wikipedia)

So: the corporate culture represents the unique style and policies of an organization as expressed by the beliefs and values of its employees. As well, and perhaps most important- the corporate culture is also seen in the official and unofficial behaviors deemed as acceptable or desired inside the company.

The peculiar and sometimes dangerous aspect of corporate cultures is that they don’t have to be consciously created in order to exist and seriously affect a business, for better or for worse-they can just as easily be a remnant of a past management legacy.

Or perhaps, the corporate culture is not clearly defined at the top of the organization or changes too frequently because of constant management changes. Then, subcultures will take over that are usually more driven by the preservation of a department rather than the thriving of the organization. And that makes sense! In absence of a clear vision and a clear set of values and accepted behaviors, it is human nature for employees to default to behaviors that create a subculture that will help them preserve their own domain and jobs.

Jeremy Gershfeld, founder of Corporate Culture & Communication firm Quartet Approach (http://quartetapproach.com/) believes that it is not easy to get a concrete grasp of a company’s corporate culture. A analogy Jeremy likes to use to describe corporate culture is the unique way one’s own family might do things and interact with each other. For example, think about visits with your family over the holidays. At a large family gathering, you might notice how family group habits can distort your own behavior. You might observe, over, say, Thanksgiving dinner, how different members of the family do things very differently, and how this affects the group’s behavior as a whole, especially when the full group is brought together.

Of course, the stakes are different in a professional environment, where individual and group goals are different than getting along with your relatives for a few days. However, the culture still exists, and the group is often bound by its social dynamics.

The lasting value of a strong corporate culture

Harvard Business School Professors Jim Heskett and Earl Sasser and coauthor Joe Wheeler assert in their new book, The Ownership Quotient, that strong, adaptive cultures can foster innovation, productivity, and a sense of ownership among employees and customers. They also outlast any individual charismatic leader.

While all these benefits are highly relevant for lottery agencies the last one is particularly salient, as lottery Executive Directors will change every few years and each new ED will bring their own sets of priorities, values and styles of doing business.

As Catherine McIntyre-Velky, a project management and process consultant who has worked with First-The-Trousers on a process optimization project for the Arizona State Lottery says: “One cannot under estimate the power of culture and its influence on productivity, especially in an environment that deals with regulations. A good strong corporate culture is as much a part of the process as the process itself. In order to successfully navigate deadlines and approvals, you must be able to speak the currency and understand the communication exchange.” 

“Your culture is your brand.” (Tony Hsieh, CEO of Zappos)

The idea that corporate culture is a strategic asset has become increasingly popular over the last few years. The most shining example, of course, is Zappos: the world’s largest online shoe store, known amongst other things for its “Wow” customer service and its philosophy of delivering happiness to both employees and customers.

Zappos CEO Tony Hsieh captures his beliefs in this quote: Our belief is that if you get the culture right most of the other stuff like great customer service or building a great long-term brand or empowering passionate employees and customers will happen on its own. He should know: his company was acquired by Amazon in 2009 for $1.2 billion.

“Culture eats strategy for breakfast”

This quote is from Peter Drucker, management consultant and business thought leader whose writings contributed to the philosophical and practical foundations modern companies perhaps more than anyone else. He argues that having a strong corporate culture is actually more important for a company’s success that a well thought through strategic plan. In the same vein, Harvard Business School Professor Emeritus James L. Heskett (and author of “The Culture Cycle”) finds that as much as half of the difference in operating profit between organizations can be attributed to effective cultures.

As such, improving ones corporate culture should be seen as an opportunity for an industry, like the lottery, that struggles with operating costs growing faster than sales and the resulting pressure on profits and revenue contribution.

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But, lottery Agencies face unique cultural challenges

Lottery agencies face two unique challenges with regard to their corporate culture:

  1. Lottery agencies are government agencies and therefore cannot incentivize their employees based on their performance like a private organization would. This in turn has a direct impact on employee morale.
  2. Every few years a new Executive Director is appointed to head the lottery agency directly impacting the agency’s culture in ways that may be surprising. Many of the lottery employees we’ve talked to across the country over the years describe their tenure with the agency not in numbers of years (“I’ve worked here for 15 years”) but by the number of Executive Directors they’ve worked under (“I’ve had 9 Executive Directors”). This point matters because of the crucial role the corporate leaders have in defining and implementing the organizations culture.

These challenges can leads to “dysfunctions” within a lottery agency that directly impact performance, employee motivation and profits. Some of the symptoms of a weak lottery agency culture are:

  1. Lack of clarity within the agency with regard to the agency’s objectives and how to achieve them. While the core objective of a lottery agency is clear, or should be (increase the revenue contribution to the state) Executive Directors tend to provide their own interpretation of the agency’s objectives and how to achieve them. This interpretation, of course, has an immediate impact on the culture and the priorities set by the broader organization.
  1. Intra- and inter-departmental silos and lack of alignment: A lack of unified culture that everyone can live by often leaves each department or even each individual to pursue their individual objectives. This leads to subcultures that may not necessarily be aligned with the organization or with other departments (but that are aligned with their understandably natural need for job security). This often leads to a lack of coordination and collaboration between and within departments which again directly impacts the overall business performance.
  1. Lack of communication & accountability. A weak culture is also often defined by a lack of transparency or accountability in the decision-making process. Employees in one department don’t know for sure what people in other departments do. Critical information is often poorly documented and not easily accessible. The default behavior becomes to only share information if needed or if actively requested.
  1. Lack of appreciation for subject matter expertise. Another symptom of weak corporate cultures is often a general lack of understanding or appreciation for how others do–or could–contribute to the mission. On a personal level this often means that individuals do not feel appreciated or valued for their roles and contributions.

Improving ones corporate culture.

The first task for any organization looking to improve its culture is to actually try to define its current culture and assess its strength by asking a few basic questions:

  1. Is the agency’s vision and core values clearly defined and consistently understood by everyone within the organization (can everyone within the organization tell you in a few words what the vision and core values are)?
  2. How motivated are the agency’s employees? How valued and appreciated do they (really) feel?
  3. Is there transparency and cooperation within and across departments or is the cooperation hampered by formal or informal silos?
  4. Does information flow freely within the organization or it is “hoarded” by specific departments or individuals?
  5. Is the decision making process (RACI framework) within the organization transparent and it is clear who is accountable for what decisions?

These questions are basic yet fundamental. And while you’d think or hope that he answers to those questions are obvious, the reality is that they often are not. However, I am always surprised, and I’ve talked to many people working in the lottery industry over the last 5 years, by how open and willing employees generally are to share this information candidly when asked (though maybe they are more willing to open up to an outsider).

Imagine your organization is a music group

Undertaking an objective self-assessment of ones’ corporate culture can be difficult. Because of that, understanding how to evolve your corporate culture isn’t easy either.

For example, imagine your organization is an orchestra playing a symphony. How would it actually sound? Does your group sound like a harmonious masterpiece that transports you into a different world or does it sound like the cacophony of uncoordinated and un-synchronized noise (think first-grader annual Christmas concert)? Be honest with yourself.

The illustration of how a quartet can either produce beautiful music or just noise based on how well coordinated and in-synch the quartet members are is at the core of Quartet Approach’s consulting philosophy. Based on an upfront audit which identifies the strengths and weaknesses of your organization’s culture, Jeremy Gershfeld and his team let you actually experience what your organizational culture ’sounds’ like now and what it could sound like in the future. In Jeremy’s own words “The Quartet Approach personifies what happens when the rehearsing and performing group of four musicians plays a substantially better group performance when the elements of their culture are healthy (as well as hearing/observing what happens when culture is not). It becomes very clear what happens when, for example, a lack of clarity in the group’s roles create a psychologically unsafe setting”.

Translating the strength and weaknesses of an organizational culture into music often creates an “aha!” moment and the discussions that result from these insights of one’s organizational culture can help determine alignment, communication, and expectations.

To conclude

Corporate culture has become an increasingly relevant subject in the business world over the last 10 years as companies have come to realize the role it plays in sustaining a competitive advantage and building a business. It is especially relevant in the lottery industry which faces its own specific challenges that could be overcome with decisive movement toward a stronger corporate culture. This type of corporate culture exploration and refinement might therefore be worth exploring as an opportunity to improve the performance and revenue contribution of lottery agencies.

Positioning-Roulette: The Value Of Identifying An Enemy For Your brand

Know thy self,
Know thy enemy.
A thousand battles,
A thousand victories.

Sun Tzu

Most good stories, including brand stories, include an antagonist, a rival, an enemy that the hero (and his followers) has to go up against and sometimes fight. Cain had Abel, Luke Skywalker had Darth Vader, Tom had Jerry, and Apple had IBM.

Identifying and taking a stand against an enemy can be a very effective mechanism to grow and differentiate a brand or to associate it with a broader world view.

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An enemy can be a potential threat (real or assumed) consumers might not be aware of (think freezer burn which is made up or all the invisible bad germs threatening your children), another segment or sub-segment in the category (for example Mini positioning itself against the big gas guzzling SUV when it was launched in the US) or a cultural or social belief, convention or behavior that may be relevant to your category and brand (for example the beauty standards used in media versus Dove’s campaign for real beauty).

The options are limitless and will be best defined by your brand unique situation, its competitive and cultural context as well as the values of the people you are trying to appeal to.

Identifying and taking a stand against an enemy can help create relevance for your brand, provide your customers with a sense of coherence and belonging, provide validation in the brand choice and create a sense of urgency to act. It can also help re-frame and increase relevance of an argument as demonstrated by the anti-smoking organization American Legacy Foundation (Truth) which successfully focused on vilifying the executives of the large Tobacco companies as a way to prevent young adults from smoking.

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Identifying and taking a stand against an enemy to create more energy and traction for your brand is just one of the 26 universal approaches to successful brand positioning development and storytelling. The other 25 can be found here.

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5 Untapped Opportunities to Connect with Moms

rosie_the_riveterThe evolution of the internet has given moms the tools (blogs, micro-blogs, fan pages and social media in general, Pinterest, Instagram, etc.) to express their individual and collective voices and to find, bond and connect with like-minded moms. In the process, they have created their own massive sub-culture expressed by the stories and experiences they share, the values around motherhood they communicate and their behaviors.

This sub-culture is not that new though to be honest (at least not in internet years). But this culture still remains largely untapped by marketers. It often seems as if brands mainly look at this cultural eco-system as a media or distribution channel rather than a source of learning and insights on how to engage and communicate with moms. It is therefore not surprising that, according to M2Mom.com (LINK), 73% of moms feel that advertisers don’t really understand what it’s like to be a mom and that 80% of moms feel that brands are doing a poor job at connecting with them.

So what are some of the elements that define this (mommy) culture and how can brands leverage those insights to better connect with and engage moms?

1. Don’t be so serious, Laugh with them (not at them).
“I shall maintain a sense of humor about all things motherhood, for without it, I recognize that I may end up institutionalized. Or, at the very least, completely miserable”. It is no coincidence that the need for humor is the first point captured in the popular “Mommy Manifesto” written by Jill Smoker, the mom behind the very successful “Scary Mommy” franchise. In fact, humor is a great “mechanism” most moms use to gain some distance from their everyday reality, bond and connect with others moms or just maintain their sanity. Insightful humor is also one of the most powerful ways to create engagement on a social media platform like Facebook. And yet most marketers seem to insist on portraying the serious, caring, multi-tasking aspect of motherhood.

2. Take a stand, represent a point of view, but avoid being patronizing:
Marketers know how important it is for their brands to have a clear point of view. That’s even more important for brands targeting moms. In fact, new moms have so many, often confusing, decisions and choices to make about everything that they will naturally gravitate towards brands that embrace a clear and relevant point of view and purpose and thus provide a welcomed short cut in this decision making process. The danger however, like with any point of view, is for the brand to unintentionally come across as patronizing. Polarizing is good. Patronizing is not. The line between the two is extremely thin, especially with moms. That’s the difference between Toys R Us (toys are more exciting than a field trip), a company you’d expect to know moms, and Goldieblox (empowering girls to become engineers).

3. Emphasize “personal stories and experiences”:
Ask the editors of the HuffingtonPost or simply look at what type of stories resonate most in the HuffPost Parenting section and you’ll learn that personal stories resulting from personal experiences are the new social currency. Personal stories and shared experiences are also the primary form of content on most mommy blogs. They are the means moms use to share, express themselves and bond with others without being patronizing or judgmental. They provide the content other moms can identify with (or not) and help create a sense of community most moms crave.

4. Celebrate the anti-hero and stop using idealized stereo-types:
Every mom will tell you that parenting is really hard and far removed from the ideal vision she had before getting pregnant. But most moms will also take a certain pride in the daily struggles of motherhood. A simple look at the stories moms share online makes this obvious. They celebrate the imperfections, struggles, embarrassments and mistakes they experience daily and find comfort in knowing that the others moms struggle too. The new ad from Coke Green from Argentina demonstrates this point brilliantly.

In that context, continuing to use idealized stereotypes of the perfect mom is the best way for a brand to distance itself from the reality of motherhood, act tone-deaf and fall in that category of brands “that don’t understand moms”.

5. Focus on the woman, not the mom.
Have you ever wondered why there are so many moms who blog out there? I believe the short answer is that after focusing for 6 months of 24/7 feeding and changing diapers moms crave a creative outlet for personal self-expression. That’s also why so many mommy bloggers actually dislike the term mommy-bloggers (and prefer “bloggers”). Subtle but significant difference. Moms are one of the most targeted audiences and brands are willing to pay serious premiums for a share of their attention. Yet some of the strongest, and unfulfilled, need states a mom has are personal and relate to her as an individual, not in the context of her role as a mom: the needs for “me-time”, for escapism, for validation and comfort and for self-expression to name only a few. “Moms Who Need Wine”, a wine distributor built a very successful business around this simple understanding. So instead of trying to communicate your brand as a means to perfect motherhood, it might be worth trying to establish it as the solution to an individual need most moms have (while still helping her fulfills her role as a mother). So instead of looking at a meal your kids will love as the expression of good motherhood, look at it as a way for a mom to get a 15 minute break and me-time (which she will if the kids eat and love what they eat). She’ll reward you for this understanding with her business.

Understanding Moms & How To Connect With Them (The 5 MN Version)

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As we all know, moms are big business. The 85+ million moms in the US represent a spending power of $2.1 trillion (Babycenter.com) and there isn’t really a category that isn’t directly or indirectly influenced by the way a mom feels about it.

The challenge is that most advertisers do not understand moms. In fact, that’s what moms themselves will tell you if you ask them. According to M2Moms (www.M2Moms.com):

  • 73% of moms feel that advertisers don’t really understand what it’s like to be a mom
    • 60% of moms feel like marketers are ignoring their needs
    • 80% of moms think advertisers are doing a poor job at connecting with them.

The speed with which the current environment has evolved makes this problem even more pronounced. Who would have guessed two years ago that mobile and social platforms such as Pinterest would play such a dominant role with moms today? Who knows what they will gravitate towards in two years. In that environment it is crucial to have a finger on the pulse on what is going on in moms’ lives.

Prior to launching First-The-Trousers, I co-founded http://www.wemothers.com, an online community catering to the emotional needs of moms. I created an online community of 10.000 moms on a $0 budget, purely through developing engaging content and by connecting emotionally with moms in social media. Through doing so, I gained an intimate and in-depth knowledge of this highly valuable and influential consumer segment.

I applied this understanding to a blog entry I wrote for the HuffPost titled “24 Clear Signs You’re a Mom” which within 72 hours was viewed by over 4 million readers and generated over 300K “likes” and 100K “shares”, a clear sign that it resonated with the readers, most of them moms. So, while we shy a little away from self-proclaimed expert status at FTT, we’ve learned a little about creating content that can reach millions of moms and can apply this knowledge and expertise by helping brands better connect with moms.

If you’re interested in getting a quick immersion in today’s mommy culture and want to understand what resonates with moms:

1. Read this blog entry entitled “5 untapped opportunities to connect with moms” which shares some of our experience building a community of 10.000 moms.

2. Read through this Slideshare presentation

3. Or, watch these “9 Most Popular Advertising Campaigns for Moms in 2013″, a list we compiled for and published on the Huffington Post (click on the picture).

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Is your core audience moms? First-The-Trousers can help you position your brand is a way that will resonate with moms, develop new product ideas they’ll find valuable and useful and develop communication strategies across channels they’ll find engaging and share-worthy. To find out how we can help you, please contact us here.

Positioning Strategies for A Post-Craft-Beer World

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Craft Beers: a compelling sub-segment brand story

The last decade has been host to a quick rise of craft breweries in the U.S. According to the Brewers Association, there are now 4269 breweries (2015) in the country, 99% of which are classified a small and independent breweries. In 2015 alone, there were 625 new breweries that opened their doors, while only 68 closed. The craft segment now represents 21% of the category in terms of retail dollar value. And during the last ten years, the category has been growing double digits for eight years out of those ten. Considering an overall declining beer category, this is pretty impressive.

DCB_LogoBehind these impressive numbers are even bigger social and cultural changes. In fact, craft breweries have helped change consumers’ expectation of what a beer is or should be, just like Starbucks changed consumers expectations of what coffee could be. This has put a tremendous amount of pressure on the large national brands as well as the broader liquor category.

The business reality is that eventually the whole segment will stabilize. Many breweries will be content with a local or regional market position. Some will disappear. Others again will be acquired by the large breweries and be turned into national brands. The last group of craft beers will try to expand their businesses with an eye toward national growth.

The unavoidable need to evolve the craft beer brand stories

Compelling stories sell brands, period, and this holds true in the beer category.

And while the craft beer stories (place of origin, their obsessive founders, the styles/flavors they brew or their creative packaging) have captured the imagination of a whole generation of beer drinkers better than the national mainstream brands have, their story is generic for the craft beer sub-segment as a whole. The inherent associations with craft breweries will become generic over time and slowly lose their motivational appeal. If fifty different craft brands brew an IPA with the same hops inspired by their respective founders’ shared belief that beer should have big flavor, and the vast majority of that fifty package the end result in an aluminum can that makes heavy use of oranges, reds, and yellows, at some point it’s hard not to become background noise.

Strategically, this means that these craft beer brands will have to evolve their positioning platform beyond the craft beer territory and explore new brand stories that would appeal to a broader consumer segment while helping the brand differentiate itself from the hundreds of other brands fighting for national attention and market share.

A natural starting point: the brand and the right consumer segment

On the international level, this is what Fosters did with its “Australian for Beer” campaign a few years back. In fact, it shaped and reinforced peoples’ perceptions of what Australia was (through the defining attributes of its people) and turned it into something people all over the world could aspire to.

718e588d4206bc72cedba64cceb610d4Another decision these brands aspiring to a national presence will have to make is what consumer segments to focus on. PBR became the brand of choice of hipsters, Modelo, one of the fastest growing brands in the US, first grew its presence within the Hispanic community before trying to broaden its appeal to all beer drinkers in 2015. And so forth.

 

 

Exploring alternative brand narratives

If the current brand story provides a compelling platform for national growth, great. If not, the brand will have to explore new positioning territories. The good news is that for an informed and experienced strategist, the options and choices are plentiful. Below, we’ll list a few positioning thought-starters and brand narratives that have all proven successful and that all could become the seed of a compelling national positioning platform and brand story:

  1. Identify a compelling role for the brand to play in peoples’ lives: this could include claiming and occupying the ideal/typical emotional territory for consumers (think Corona), owning a typical consumption occasion, validating consumers self-image, acting as a cultural or social symbol for its consumers (think Molson Canadian) or re-defining the category standard in terms of perceived quality (think Stella Artois for example).
  2. Create a more compelling and differentiated product story, this can include the brand’s defining attributes, its ingredients, its brewing process (think Bud Ice), the sensory attributes of the brand and the meaning associated with those attributes (taste, color, smell, etc.).
  3. Reflect the aspirations and reality of their core audiences and thus create identification and bonding. This can be done by reflecting consumers’ values, relevant needs and lifestyle or by addressing specific concerns the target audience might have.
  4. Re-position competition (both within the beer category and beyond). This could be done by exploiting a competitive weakness, by occupying underserved but relevant category needs and emotions, by resolving a category paradox, by further educating the consumers and by helping them evaluate the qualities of a brand (beyond name and taste) and by introducing new types of benefits.

For a strategically educated eye, there are a lot of potential options to tell a compelling brand story that would have national appeal and that would enable a regional craft beer to expand nationally.

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The narrative examples mentioned above aren’t random. Instead, they have been generated using First The Trousers’ proprietary positioning development tool (Positioning Roulette) which identifies the 26 universal approaches to brand positioning and brand story telling (you won’t find a 27ths) based on the analysis of over 1200 case studies of effective brand building.

26 areas

Using Positioning Roulette for a systematic and informed exploration of those 26 universal brand positioning approaches will enable the right brand team (in the context of a workshop, for example) to identify all positioning options available to tell a compelling story for a specific brand. Further, it allows you to quickly validate the most promising one, something no other positioning methodology provides with this level or rigor and speed. This methodology also provides a strong framework to help differentiate various brands within the same brand portfolio. Positioning Roulette works for both new and established brands and can even help identify new product and positioning territories for further exploration.

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It will be interesting to see how the craft beer sub-segment and the larger beer brands in general will evolve their brand story over the next few years. It will also be interesting to see what brands achieve national stardom and what brands will disappear.success1

One thing is for sure though: only those brands who proactively think about the future and how to evolve their brand positioning and brand stories in order to adapt and help shape the market will survive.

Please feel free to contact us to find out more about Positioning Roulette and how this methodology can help your brand.

 

 

7 Potential Growth Strategies to Revitalize Harley Davidson

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Harley Davidson, A struggling icon

Harley Davidson is a brand that has always fascinated me. Its history is rich, its equity and heritage are amazing and it has established itself as part of American culture, just like baseball and apple pie. It is one of the very rare brands people have been willing to tattoo on their skin and has an iconic, almost religious status most other brands envy and lust after.

And yet: the brand is struggling badly. According to analysts’ reports, people seem to prefer buying used bikes or the recently relaunched Victory and Indian brands (owned by Polaris) rather than a new Harley. As a result, overall market share and sales are down versus a year ago, and so is the brand’s stock value.

But declining market share isn’t the brand biggest problem. Its biggest problem is its positioning and eroding brand equity. Historically, a brand’s sales erode first and faster than its brand equity. But after a few years of declining sales, the brand equity start to erode as well and that’s when the brand’s death spiral starts and it becomes very difficult to recover.

And I think Harley may be approaching the point of no return.

Now, it does look like the brand is feeling the pressure and has a sense of urgency to change things. In fact, the company intends to increase its product development budget by 35% in 2016 (versus 2015) and it marketing budget by 65%. And that’s great. However, I believe that this increase in resources and spending will only throw gas on the fire if it isn’t also accompanied by an evolution of its brand positioning platform, the only way to secure the brand’s long term success.

A category of one

Harley, over the decades has established and created for itself a “category of one”. Nothing out there really compared to a Harley Davidson. That is until the recent revival and relaunch of the Victory and Indian brands that have started to successfully nibble at Harley’s market share. However, the Victory and Indian brands aren’t the real medium term and long term threat Harley is facing.  Sure, they may be (and are) winning short term, growing quarterly sales and eating some of Harley’s cheese (good for them) but in the midterm they are running the risk to fall into the same trap as Harley.

In fact, the real problem Harley needs to solve is that this category of one it has created is slowly but surely losing relevance and eroding value. What has made Harley successful for so long is now working against the brand and I believe is acting as a major barrier to purchase.

So what can Harley Davidson to get out of this precarious situation? Well, for one it can learn from our best practice research on how to succeed with young adults and apply the “Ten Habits of Successful Millennial Marketers” to its own marketing. The second thing it can do is to seriously reexamine its positioning platform, identify the core values it wants to preserve to stay true to its history but also understand what values need to change and evolve in order to thrive again. Harley’s brand equity needs to evolve if it wants to survive.

An agile strategic thinking framework: Positioning-Roulette

First The Trousers Then The Shoes Inc. uses a unique methodology to analyze brands and create compelling brand stories called Positioning-Roulette (PR). PR is based on the analysis of over 1200 case studies of effective brand building which helped us identify the 26 universal approaches to successful brand positioning, which represent the core of our methodology. We can apply these 26 universal approaches to analyze a brand’s current situation and to help identify potential strategic solutions that will help the brand evolve and move forward once validated.

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For fun, we’ve spent an hour or so doing just that, i.e. look at the Harley brand through the lens of Positioning Roulette. Here are some of the opportunities we’ve uncovered.

  1. Value-Proposition based on intangibles: People don’t buy Harley for rational reasons. They buy Harley because of the brand mystique, not because it provides a better value proposition (what consumers actually get for your money) than Japanese or German motorcycles. It doesn’t.  And that’s not necessarily a bad thing.

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Also, Harley bikes are expensive (even though it introduced the Dark Custom line of bikes a few years as a point-of-entry line starting at $11,000 to appeal to younger buyers) and therefore out of reach for most riders under 35 years old. This is particularly important since Harleys are usually bought as a weekend toy rather than as the primary mode of transportation. Outside the US, the situation is even heightened, since the majority of bikes bought outside the US have a utilitarian purpose, for which a Harley is not suited (try to ride the dirt roads of India with your wife and two kinds in the back on a Harley).

While Harley may have to address this value proposition issue over time mainly through product innovation (and it looks like it will), the immediate implication is simply that Harley needs to continue to maintain its edge through emotions and intangible assets. It is in that space that Harley will find its salvation. A Harley, in other words, may not always do more, but they can endeavor to make owning a Harley mean more.

2. A fertile cultural context:

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Culturally, Harley Davidson couldn’t be in a sweeter spot. The US is at a crossroads. People are tired of the establishment and are nostalgic for a past ‘greatness’ again. Americans want to be able to feel proud of their country again and long for better times, which helps explain the rise of presidential candidates like Trump for the GOP and Sanders for the Democrats, both seen as outsiders to the system and therefore an appealing alternative to the establishment candidates. This cultural sentiment is at a tipping point and might be worth further investigation as a way to help reposition the brand. In fact, Harley Davidson represents the epitome of Americana- a muscular, pure, powerful brand that cues everything that’s good and aspirational about this country. Therefore, Harley may have the opportunity to take a leading role in this movement and capitalize on this collective sentiment.

The brand has therefore the opportunity to tap into this cultural tension and become an instigator of cultural change (while staying away from politics) and thus regain relevance by helping people feel personal pride and pride in their country again. Dodge has done it with Detroit, Harley can do it with the USA. 

Defining brand attributes:

From our perspective, two brand attributes stand out for Harley. One could help the brand, but the other is hurting it.

3. An unappealing user imagery: 

People nowadays define themselves more by their behaviors rather than by their appearance. The stereotype of the Harley rider is (culturally) still this bad ass and slightly intimidating rider at best (thank you Easy Rider), but also (based on people’s every day experience on the road) the OWGs, the old white guys trying to reclaim their lost vitality or youth. And frankly, this second stereotype doesn’t represent someone most people aspire to become (sorry OWGs, don’t skin me yet, just read on).

BACA-R

However, what is interesting and aspirational about Harley riders is not their looks (or the way they are stereotyped) but their characters and their actual behaviors. When you start to interact with bikers you quickly realize that they are actually really successful, nice, every day people who love their country and their families. Those are people with a very strong sense of community and a sense of duty, all highly relevant values nowadays, all values most people can identify with. Also, when you dig a little deeper one also realizes that a lot of biker clubs do a lot of good, community focused, deeds. Who hasn’t heard of the bikers against the Westboro Baptist Church or the BACA group (Bikers Against Child Abuse) who are dedicated to helping, protecting and providing a safe haven and a “family” to abused children. In that context, the intimidation factor actual helps to help the kids feel safe and protected. Besides these two highly visible efforts, most bikers clubs also do regular fund raiser rides, something most people will support, identify with and aspire to.

Harley should change its brand user imagery by emphasizing that Harley riders do rather than what they look like or are stereotyped. These Harley riders’ behaviors are highly relevant and appealing to many young adults nowadays and might be worth further exploring as a way to help re-position the brand (i.e the brand for people that DO…rather than for people that LOOK like…). This approach would also help the brand become more “inclusive” rather than “exclusive”.

4. A unique product experience and brand experience:

People increasingly define themselves by the experiences they make and the stories they collect rather than by their material possessions. Harley has several distinctive brand attributes but one that really stands out is that it is the epitome of an “experience brand”, something more and more people crave. The design of the bikes, the unique sound and rumble of the engine, the feeling experienced when riding the bike are all highly relevant sensory benefits when expressed and brought to life properly and in the right context.

Another opportunity for Harley Davidson would be to embrace the fact that it is an experiential brand and extend this unique attribute beyond its product experience to encompass the whole brand experience. In other words, maintain one of its core attributes and equities but translate it into a broader brand promise around experience seeking, something most consumers out there crave. 

5. Category drivers in need of evolution:

From a communication point of view, Harley seems to be stuck in a pattern. Historically, the brand seems to have built its communication on the insight that many people dream of one day owning and riding a Harley but tend to delay their purchase –the emphasis being on “one day” and “delay their purchase”. In other words, the brand has tried to activate “dreamers”. Recently, they’ve focused on a slight variation of this insight, the fact that most people buy a Harley to ride with their significant other, a family member or a friend. People often become riders themselves because of a family member. I am not sure how well these approaches work but I suspect that it may have helped to get some of the lower hanging fruit. However, I don’t think that it will help the brand long term as both approaches just help reinforce the brand’s current platform. This approach merely reinforces Harley’s equity rather than help evolve it. It doesn’t tell consumers anything new about the brand, anything that would get them to reconsider the brand.

Harley needs to tap into a different set of consumer motivations and category drivers if it wants to evolve and appeal to a broader audience. The ones it has used in the past may have helped short term sales, but they haven’t helped shed a more relevant light –and therefore consideration- on the brand.  

6. A shift from the brand (exclusive) to the consumers (inclusive):

One of the key problems Harley faces is that the territory it occupies is very well defined and very strong. But it is also a little too dominant and overbearing. Harley was put, purposefully or not, on a pedestal. From a branding perspective buying a Harley is like joining, embracing and submitting to an exclusive church. When buying a Harley, riders buy into a cult, something people start to get increasingly reluctant to do.

MensRidingJacketsThumbTo illustrate this point, just look at Harley’s line of apparel, symptomatic to a bigger brand problem. Harley’s merchandise looks actually pretty cool and is of high quality but expensive. However, the problem is that all this merchandise is very heavily Harley branded. When you buy a Harley jacket, or pants, or shirt or gloves, you basically accept to become a walking (or riding) Harley billboard. This is probably something that attracts the OWGs. The problem is that this was a very popular in the 80s (wearing heavily branded merchandise and fashion), but not any longer. Nowadays people instead prefer to mix and match various style and brands (new and classic) to create and express their own individual personality. And that’s kind of difficult with Harley.

Another opportunity for Harley might be to come down from its pedestal, become more inclusive rather than exclusive and allow its consumers to use the brand as fuel to express their own individuality rather than just amplify the Harley brand. People today want to have the option to “participate” or even “lead” but with Harley they are merely given the option to follow. People also still want to “belong” to a group or community, but Harley’s version of “community” doesn’t seem to have the traction it used to have any longer. Shifting its focal point from itself to its consumers will provide the brand with a broader appeal.

7. An evolution of the brand’s archetype:

Another way to look at Harley is through the lenses of its archetype. Harley’s brand archetype has always been the “Outlaw”, the rule breaker, the brand that helps you (or rather the 55 year old white guy) feel like a misfit and a bit of a “bad-ass”.

easyrider_3078291bThe problem however is that this archetype (or at least its current expression) seems to have lost relevance in its current form. Society has evolved towards a more accepting and inclusive structure. The people we look-up to and admire aren’t necessarily reflecting the outlaw archetype any longer. The 1%er has a totally different meaning nowadays. So as a result Harley could either re-examine what it means to be an “outlaw” today and find a more contemporary and relevant interpretation of it. Alternatively, it could explore the opportunity to evolve the archetype into either a Hero archetype (a brand that helps you be a better self) or even better into an Explorer archetype (the brand that helps you experience new things & ultimately independence), both of which better fit today’s consumers core values and aspirations better than the “outlaw”. Evolving or changing a brand’s archetype is not an easy feat or something that should be done lightly. But in Harley’s case it might be worth exploring carefully (a shift from the Jester archetype to an Explorer archetype for example helped Taco Bell turn around its business and gain a renewed relevance with consumers).

This evolution of the brand’s archetype would have a deep impact on everything the brand does and therefore how it is being perceived by consumers.

To conclude

So what is the right answer for Harley?  Based on the little information we have, it would be presumptuous to make an actual recommendation. The point of this article wasn’t to solve Harley’s positioning problem but to illustrate how Positioning Roulette can help uncover new opportunities and ways forward by providing the strategic agility to look at the brand from various, very different perspectives, something most positioning development methodologies aren’t able to. In the hour or so we’ve spent thinking about the brand we’ve been able to identify 7 very different perspectives on how to approach Harley’s branding problem. Imagine what a more informed, rigorous and collaborative process that would explore all 26 universal approaches of Positioning-Roulette would yield.

I believe Harley can turn around its business situation if it manages to evolve its unique position, maintain its core equities while adding new, more relevant and more contemporary equities that help better align it with today’s consumer base. Our model illustrates that there are many opportunities to do so. Further, the brand still has a tremendous amount of goodwill. Harley Davidson belongs to this exclusive club of brands that people really want to see succeed. Not many brands can claim that.

The big questions therefore are “will the brand be able to overcome its own internal culture and evolve?” and “will it be able to strike the fine balance between the stability and consistency that the brand’s current OWGs want and what new consumer segments and society at large aspires to?” The opportunities are there. They just need to be explored and validated.

P.S.: A Word On Indian & Victory

In the introduction we mentioned the brands Victory and Indian and the fact that they seemed successful in stealing share from Harley Davidson recently. In the short term, and after having been absent for a while, both brands needed to re-establish their credentials and their brand heritage. Attacking Harley, and positioning themselves as an alternative in the same iconic sub-segment may have been the right way to do so in the short term. It gives this core consumer segment a choice. However, both brands will soon start to suffer from the same problems Harley does, because those problems are symptomatic of the subcategory in which all three brands are operating.

Both brands would be smart to change and evolve their positioning platforms and marketing approach soon if they don’t want to face the same issues Harley is now facing. The advantage both have is that they are new still fairly new, i.e their equity doesn’t weigh as much on them as it does for Harley Davidson.

What do you think? What could Harley do to get out of the situation it is in? And feel free to contact me to find out what Positioning Roulette and First The Trousers can do for you.