Question

Topic: Book Club

Ries: We Interrupt Our Expansion For A Divergence

Posted by Anonymous on 500 Points
Actually divergence is fairly difficult to see at work. What Al and Laura Ries contend in The Origin of Brands is that the process is actually "slow and insidious", thus leading corporate executives astray. It's only by connecting the dots back in time that you can see the effects of divergence. And unfortunately, they say, by then, it's too late.

The image they use as example in the law of the closet hits close to home. Every day, every closed in America gets messier and messier. The only solution to the closet problem is to restructure and prune regularly. Divergence is not the same as diversion. Quite the contrary: it indicates an uncommon focus and concentration of resources.

In Chapter 13, The Power of Pruning, the Ries talk about divergence as in focus and downsizing. Language is also important, as people talk in specifics, not in generalities.

You hear this word often in gardening: a good pruning will let your plants grow healthier and stronger. Alas, we do not hear it enough in the boardroom. What we hear about is expansion, yet expansion is more often than not the culprit when businesses stop working. As a category evolves and diverges, a company has to decide which paths to take and which to ignore.

When a category diverges, it grows further and further apart from the company's core brand. So it needs a new brand. Some examples of brands that succeeded are: Lexus (Toyota), DeWalt (Black & Decker), Dockers (Levi Strauss). What are some other examples of good pruning? And what brands could use a little cleaning up instead?

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RESPONSES

  • Posted on Accepted
    "As a category evolves and diverges, a company has to decide which paths to take and which to ignore."

    Valeria, this is likely the most critical business decision a company faces...yet what most are worst at. And I understand why, our culture has taught us that bigger is BETTER, that growth means wide expansion (not deep focus). Moreover, as marketers we're taught to identify opportunities so when we have many at our fingertips it's easy to see these as lost opportunities not an opportunity for greater focus.

    It's a challenge for companies. As a consultant I find it a challenge for me, too. It's hard to pass up opportunities that might divert my focus. On the one hand, I want to stick to my competencies; on the other I want to grow into other areas. So I'm constantly having to balance this challenge so as to practice what I preach to my clients.
  • Posted on Author
    CK -- It's fascinating to note how we are often afraid to choose. The thinking may be that we close off an opportunity or a number of them if we pick only one.

    Yet, if we look at the choice we make as a chance to dig deeper and really explore *that one* thing, we could end up developing a much broader offering.

    Ah, the stretch assignments. How far should we think of going before we reach the point of no return -- both in time and investment?
  • Posted on Accepted
    Most of our concepts were developed by a making mistake and then trying to figure out where we went wrong. Years ago I ran an advertising agency that also did strategy until someone said to me, "You're not taking your own advice."

    Good thinking. We got rid of the advertising half of our business and focused on the strategy half. It made all the difference in the world.
  • Posted on Author
    Al:

    My best lessons came from mistakes I made. I'm in transition right now and consulting jobs are coming to me like you wouldn't believe. People know me as someone who can get things done.

    It would be easy to interpret that as I can physically do it. But that is not where my strength and value are. My sweet spot is seeing the whole and knowing who exactly should be involved in each part. That was the genesis of "Conversation Agent", my blog.

    Will I have my own company? Maybe, one day. For now, I am more interested in learning how to follow my own advice, as you said with such better economy.
  • Posted on Accepted
    Sorry no answer to the pruning examples, but I will attest to the personal positioning question in my work. I'd like to be solely in product marketing because of my previous work environments. Yet my skills are wide and varied from graphic design, to web development, to sales, to CRM, to market research, to bringing in great talent from friends and associates to get a needed job done. As long as I'm having fun, connecting with the client, and not getting in over my head...I'm happy. When I know I'm not qualified, I'm happy to make a referral and hope the client will just like to talk again someday.
  • Posted by Mark Goren on Accepted
    Wow, this is a great thread. I'm sorry I didn't join in earlier.

    I've found the consulting gig to be enlightening, eye opening and challenging, all at once. I love what I do. I love where I'm headed.

    "On the one hand, I want to stick to my competencies; on the other I want to grow into other areas."

    Beautifully said, CK. And the balance isn't always easy to find. Do I choose projects that will only help me get to where I'm going or do I go with the ones that fit perfectly with where I've been? Probably a healthy combination of the two is the answer.

    "My best lessons came from mistakes I made." Very true (actually wrote about that the other day over here: https://transmissionmarketing.ca/?p=143)

    Mistakes are an integral part of growth, guess the key is to ensure that they're not too costly!

    "When I know I'm not qualified, I'm happy to make a referral and hope the client will just like to talk again someday."

    That's smart business, Mario. It's an intelligent, thoughtful approach that will pay off in the long run.
  • Posted on Author
    Mario -- Thank you for stopping in. I'm finding that we're much more receptive to conversations that touch upon personal experience and work. My original question about brands quickly became about our professional environments and personal brand.

    Mark -- I like the idea of a healthy combination of projects; some stretch assignments, some which leverage more securely our abilities and past success.
  • Posted on Accepted
    Valeria,
    to get back to your pruning question...I just remembered the following example of divestiture and thought it made categorical sense.

    In the fall of '97, PepsiCo spun-off KFC, Pizza Hut and Taco Bell thereby forming Tricon Global Restaurants Inc....later becoming Yum! Brands. PepsiCo also divested its bottling business into Pepsi Bottling Group.

    Since then, they acquired Quaker Oats and Tropicana; thereby adding more to its categories: drinks and snacks. Most important to the Quaker Oats acquisition was the Gatorade brand. PepsiCo then divested a weaker sports brand, All Sport.
  • Posted on Accepted
    I 'm not adding to the examples of divergence because those cited are very instructive. I think citing more examples might be one of the problems. We clearly see the divergence once it has happened ... and that's to late. As marketers we would all like to be able to determine the sweet spot of divergence for any particular product (or our own personal brand).

    It seems that we have to study the history of brand divergence to see if there are any kernels of truth that will help us determine what could be a successful divergence earlier...much earlier.

    At what point do you take the big step and actually identify (either a product or your personal skills) the new "thingy" as a true divergent arena with a unique name or you recognize the "thingy" as a dead end, or a short term convergent item?

    The book helped me to clarify the divergence/ convergence concepts, and I really enjoyed the cases cited. Hopefully, this will help more entrepreneurs find the point of divergence in the all-important "first" position.

    Or, we will soon see a new book with more analysis of this concept.
  • Posted on Author
    Mario -- I must have gotten off on a divergence... apologies. Good examples, thank you for sharing.

    Marni -- welcome to the conversation and thank you for taking the time to leave a response. Bingo! Hindsight is 20/20. How can we see it coming so we can be prepared to act on it?

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