Читать книгу Provoke - Geoff Tuff - Страница 15

Daddy, I used the “Dude Wipes” and my tushy feels minty.

—Grayson Goldbach, age 5, during the great toilet paper shortage of March 2020

Before the pandemic, you probably took toilet paper for granted. And reasonably so. It's one of many things that we use every day without much conscious thought. It's something we just assume will be there for us – until it's not. That's when people go into a mini-panic. Remember the episode from the television show, Seinfeld, where the antagonist du jour told Elaine, “I don't have a square to spare”? The pandemic gave us a window into how humans would behave if a TP shortage were an ongoing challenge.

We believe human behavior is the most basic “subatomic element” of business. The pandemic gave us many opportunities to observe human behavior under periods of severe disruption. And it turns out that, when faced with such massive disruption, toilet paper is one of the things that helps people feel secure when on hand in large quantities. We also learned that people really have no idea how much toilet paper they actually need … so much so that in early 2020, a plethora of toilet paper calculator sites suddenly started to pop up on Internet ad feeds – something neither of us had imagined needing before.

The combination of fear and poor estimation led to some pretty interesting hoarding behavior and a resultant run on toilet paper. Rational or not, it was most certainly the case that when you went to buy TP it was difficult to find.

Before getting into this any further, let’s just be clear – we are going to devote a fair bit of Chapter 2 to the behaviors around, well, Number 2. Why must we talk about something that makes everyone just a slight bit uncomfortable? This was the best example of something that literally everyone must do, and, as it turns out, there were many new and interesting ways people dealt with the potential shortage. And new and interesting human behaviors are the building blocks of opportunity.

In one instance, we saw consumers leverage technology to make the sharing of toilet paper simpler. One such instance was captured on film in San Francisco, the technology hub of the world, where a person flew a drone to a friend who was in need. (It's worth the reading break to watch the video here: https://mashable.com/article/drone-delivery-toilet-paper-san-francisco-coronavirus/.) Could you imagine this as a business at scale? Instead of ride sharing, imagine a local TP sharing service with delivery-on-demand via drones. Maybe not. In another instance, we saw South Carolina police handing out toilet paper instead of tickets as a gesture of goodwill at the start of the pandemic.¹

As it turns out, though, the need for actual toilet paper is not the issue. It's the fear of being without toilet paper that leads to hoarding behavior. We wish we could say we were “enlightened consumers” and didn't hoard, but we'd be lying. We freaked out, too. Steve did the grocery shopping in his household during the pandemic (a behavior that stuck as the initial lockdowns lifted) and was instructed to buy whatever toilet paper he could find on every trip. His family ordered commercial-grade toilet paper with a delivery date of six weeks out, just in case. They even ordered a brand of wet toilet paper they could find online for quicker delivery: “Dude Wipes.”

In times of dramatic change, humans are known to change habits, which can lead to permanent behavior change. At the time of writing, it's not yet clear what new habits will stick once we emerge from the pandemic, but it is clear that many longstanding habits will be challenged. A greater proportion of people will certainly be able to work remotely on a more frequent basis, even when there is return to office work. People will likely pay more attention to frequent handwashing. And maybe people will continue to make sourdough regularly at home.

Habits are a critical underpinning to businesses. Think of all the brands that you buy all the time without thinking – including, most likely, your brand of milk, your laundry detergent, and your deodorant. You probably have a habit around your morning coffee, whether you make it at home, pick it up at a basic local coffee shop, or pay premium prices from national retailers. And, until you read this last paragraph, you probably didn't think about it much.²

During the pandemic, many of these habits were challenged. For both of us, used to getting “our coffee on the outside” (to quote another Seinfeld line), we had to adapt during the lockdown. Geoff returned to getting his coffee on the outside as businesses opened up, while Steve is more than happy to continue to brew his own, having become proficient at making coffee with a French press. As sticky as they are, when habits do change, they impact businesses considerably.

So, given the magnitude of the challenge, did we see a shift in the market for toilet paper or substitutes? As it turns out – yes! A small group of consumers made the decision to no longer be beholden to toilet paper supply. They installed bidets in their homes.

Lest we be accused of only paying attention to the U.S. market, we should acknowledge that bidets are commonplace in many countries around the world, even mandatory. In Italy, for example, a 1975 hygiene law requires bidets to be in at least one household bathroom. In Asia, a company named Toto brought bidets into the digital age with electronic control panels and became a staple in Japanese homes. And then in March 2020, sales of bidets rose dramatically in the United States. Some companies saw sales peak at more than 10 times normal volume.³

The critical question this raises – for paper supply companies, for white goods manufacturers, and for consumers looking to move when prices are right – is whether this shift is a one-time blip in sales or a more permanent trend toward the use of bidets among Americans.

Let's leave the bathroom behind for a moment and generalize the concept that we are going to examine for the remainder of the book. Broadly, there are two phases of any trend, each characterized by the nature of the uncertainty around the trend. In the initial “if” stage, it's still uncertain if the trend will come to fruition; in the “when” stage, the trend has progressed, gathered momentum, and crossed an important inflection point where it's no longer uncertain whether it will come to fruition. It's only a question of when and, sometimes, to what extent.

Our core hypothesis for this book is that once an “if” becomes a “when,” the nature of a leader's response must change. The opportunity is to focus on the moves you can make that will shape the trend to create a better future – one where your organization is advantaged.

The “if-to-when” shift is, as we wrote in the Introduction, similar to a rollercoaster. That big initial climb as a cable pulls the car up the hill is the “if” stage. The rollercoaster cars are building up a ton of potential energy, and if they stop, they might just slide backwards. But when the cars get to the peak and start to tip, that potential energy becomes kinetic and the momentum takes the cars through loops, twists, and turns, seemingly with a life of their own. Once you hit that inflection point, the “when” stage kicks in. During this transition – something we call the “phase change” – the critical question is how long it will take for the trend to resolve into inevitability.

While it's impossible to be exhaustive about all the mechanisms that might be at play in moving from “if” to “when” (human behavior is admittedly more complicated than the physics of rollercoasters), we like to lean on something from the world of design-driven innovation called the “Balanced Breakthrough Model.” The basic notion behind this model is that a “balanced” innovation that has more likelihood of succeeding in the market will simultaneously build in aspects of desirability (the market wants it), feasibility (the innovator can produce it), and viability (the innovator can eventually make money from it). Similarly, a trend that seems headed in the direction of checking all three of these boxes has a much higher likelihood of passing through the phase change to “when” than other, less robust trends.⁴

The most critical aspect of desirability is the degree to which the trend has an unequivocally better outcome than the current state. If the endpoint of the trend is better for all customers on every dimension relative to what exists today, then it's only a matter of when it will take off. That assumes it is or becomes feasible and someone figures out the right business model to make money from it … but we're strong believers in almost anything being possible if the right demand conditions are in place. If the improvement is only marginal or only meaningful to a small proportion of the population, then feasibility or viability needs to be off the charts – likely via a cost advantage – since it offers less potential economic reward.

Consider the cord-cutting example from Chapter 1. The main benefit of cord cutting is that you get to watch the shows you want to watch, when you want to watch them. When compared with the need to conform to someone else's predetermined schedule, it is unequivocally better to have the flexibility to watch your show on your time. Even if by some amazing coincidence you wanted to watch the shows at the exact time that all the networks scheduled them, you would be no worse off than before. In this case, there is no uncertainty around the trend's desirability. Cord cutting is clearly better for consumers, so the question is whether you can overcome the feasibility and viability barriers.

Naturally, desirability is always relative: defined by the perspective of any individual consumer. Each has different tastes and might find different things attractive. Therefore, you should never (only) look at the market on an aggregate basis. Even with cord cutters, where the feature of being able to watch your shows when you want is better for all, that feature may be of more or less importance to different segments of the population. Especially in the early stages of a trend's appearance, “superusers” who are more willing to break longstanding habits to adopt a new behavior hold the key to understanding what the future might have in store.

Consider the launch of ride-hailing services. In markets like New York, where the existing taxi infrastructure didn't allow for calling a taxi, or consumers didn't find the experience clean, having the ability to hail a clean car from your phone at a similar price is unequivocally more desirable for the vast majority of consumers (granted a small minority just liked the yellow cab experience or took some comfort in the fact they were regulated). All the existing features are present with zero trade-off. However, other segments of the market might include significant trade-offs. In London, for instance, where taxi drivers are required to go through comprehensive training, there might be a trade-off on knowledgeability of the driver.⁵ Or in other markets where it was easy to phone for a taxi, the trade-off might have been less obvious. Therefore, it was quite predictable that ride hailing would take off quicker in markets with less attractive existing competition (other things being equal). The question was not “if” but “when.”

At this point, some readers may be wondering – “Wait, don't these if-to-when rollercoasters come in different sizes and shapes?” Absolutely: slopes vary, the height of the peaks vary, and the overall cycle time passing through the phase change from “if” to “when” varies as well. This additional dimension of “to what extent” a trend matters naturally leads to the question of how to know which early, weak signals to pay attention to. There is sadly no simple answer to this. The best provocateurs pay attention to all weak signals, at least to begin with. As a general rule of thumb, anything that has the possibility of impacting your foundational business model – or mission – should be paid particular attention to. For our Al Bundy executive, his business model was predicated on bundling multiple products to derive higher revenue from a stable customer base. Early on, he should have recognized that having that 1.75% segment – with customer buying behavior signaling desire for unbundling and less traditional product features – grow substantially could disrupt his whole growth system. The trick is to develop a method to pay keen attention to all early and/or weak signals and quickly assess their possible level of influence on your model for success. There will be some red herrings in the mix, for sure, but better in the early stages to set the aperture purposefully wide rather than to apply inadvertent blinders.

Many trends are complicated to consider because they aren't easily characterized by unequivocal desirability. Typically, a feature will be desirable for some but not others. Consider the market for e-readers. There were many predictions that e-readers would eventually dominate the market since their inception in the late 1990s. However, as of a few years ago, they only accounted for about 20% of all U.S. book sales according to the Association of American Publishers. Penetration outside of the United States is lower, with user penetration in Europe approximately 12.5% in 2021 according to Statista. As it turns out, the segment of customers who only consume content digitally is small – about 7% of U.S. adults according to Pew research.⁶ We might surmise that this segment might value portability, the ease to carry multiple books without adding weight, or values a lightweight reader (when compared to a new hardcover novel). Beyond weight, perhaps this segment might value searching, or carrying their entire library with them on the road. Our friend and colleague Maeghan Sulham (without whom this book wouldn't exist) reports that her family loves e-readers because they allow for reading in bed with the light off, meaning bed partners can sleep more easily.

Although there may be lots of benefits, this segment remains small, especially when compared to the 37% of readers, who according to Pew, read print books only. These consumers clearly don't care about weight, having a digital, searchable library, or reading with the lights out. Or if they do, they don't sufficiently care to change existing reading habits. Perhaps there are benefits only available in print books that they value above others – like the “feel,” or the ability to have a book signed by an author. This sort of desirability pattern is far more common, with opportunities being relevant to some consumers, but not others.

As markets mature, new entrants find ways to address desirability gaps in smaller and smaller proportions of the population – a typical industry evolution. The initial entrant effectively “creates” the industry with the advent of a new product or service that defines the market (and since they are the only competitor, they are the “average” as well). Then other competitors enter with slightly different features – a higher quality version for a higher price, or a lower quality version for a lower price. Over time, the market fragments with different offers to satisfy the various stages of the market until it is no longer economically feasible to serve these different segments. Typically, this is when we start to see consolidation. We are increasingly seeing this process of innovation, fragmentation, and consolidation happening faster and faster as consumer adoption through widely used channels, like mobile apps, can take place quickly.

In the food delivery space, we initially saw several different players in various markets around the world. In the United States, it started with GrubHub, SeamlessWeb (which became Seamless), and even the now “retro” MenuPages. Looking to capitalize on a growing market, we saw the entry of DoorDash, UberEats, Postmates, Caviar, and others. In Europe we had Takeaway.com based in the Netherlands and Just Eat in the UK, along with a variety of other services. Over time, this intensifying of competition has led to decreasing margins and more consumer choice. The decreasing margins in turn led to consolidation to find economies of scale. We have seen this over the last several years with the merger of Just Eat and Takeaway in Europe, which later purchased GrubHub (which had previously purchased Seamless). In late 2020, UberEats completed a multibillion-dollar deal to acquire Postmates. And DoorDash acquired Caviar, a service that specialized in upscale urban-area restaurants that do not typically deliver. A very fast consolidation indeed!

In Provoke we are going to focus primarily on the kinds of trends that define or redefine industries and secondarily on the trends that segment industries. Why? By definition, the trends that define or redefine industries are the trends with the biggest opportunity to improve lives for customers and society.

If desirability frames the potential opportunity, feasibility and viability are the governors of how fast it can happen. You may be able to identify many opportunities to improve the status quo, but you have to be able to bring them to fruition economically. Several barriers can stand between something that is clearly desirable but not ready for mainstream adoption. There are several categories of these barriers.

Behavioral feasibility sits at the intersection of desirability and feasibility. Probably the most important question of feasibility is whether or not customer behavior can be changed to accommodate the trend being evaluated. It's not enough to have a superior product or experience; that doesn't always win the day. Trying something new often involves breaking longstanding habits – some of the most powerful forces in the world of customer behavior. For example, while organizations have become more comfortable with the concept of remote working, it's not clear if the trend will accelerate or if employees will want to forgo their commutes entirely.

Forming a new habit is easier when it's forced upon you by strong external circumstances like a pandemic. It's an entirely different thing to create a new habit when there are no forces acting in your favor. As a result, it takes real momentum to accomplish the goal of crossing the important inflection point of behavioral feasibility. Customers have to become aware of the trend, try it, repeat it, and often share the experience with others in some meaningful way for consumer feasibility barriers to be overcome.⁷ And by the way, we know some of you reading now are saying, “Does this really apply to my business, which is B2B?” The answer is 100% yes. You too have human beings making decisions about which products and services they buy, whom they get to bid on those services, and the organizational habits (or systems and processes) that they encourage regarding how they purchase from vendors.

Technical feasibility refers to the degree to which it is physically possible to do the things necessary to create the trend. For instance, Uber broke prior technical feasibility barriers by putting together their code with previously existing navigation capabilities. We know that self-driving cars are technically feasible. And the pandemic response showed that rapid vaccine development is also technically feasible, if other barriers can be lifted.

Regulatory feasibility answers the question of whether it's legal to create the trend. Regulations tend to be reactive to the market rather than proactive. To create a new market, you often must overcome existing regulatory barriers. Uber, for instance, challenged existing regulations around the world. Another example is how SpaceX is engaging with the Indian Telecom Regulatory Authority (TRAI), to help solve an important challenge – high-speed Internet access across India. It is looking to launch a constellation of satellites in lower orbit capable of providing 150Mbps service where the average speed for the country is around 12Mbps. The project is meant to overcome outdated regulations which were designed for different services to solve an important access issue.⁸Viability asks whether it's profitable to create the trend. The answer to this question is almost always murky. There are rarely any economic guarantees. What matters most is whether someone sees a sufficiently (to them) clear path to make money in the future to bet on taking the necessary steps to bring the trend to fruition. This is by definition a subjective question; two different organizations might look at the same opportunity and draw very different conclusions. But the viability test only requires one to take the bet. To some extent, it doesn't matter whether the venture is truly profitable in the long run because market creation may happen in advance of profitability (again, see Uber). True economic viability can only be determined in hindsight.

So what happened to the market for bidets in the United States? Did it continue to surge over the “if-to-when” phase change, or did it fail to create enough momentum? The latter. Bidets had some interesting short-term spikes in sales, but the spike did not turn into a long-lasting trend toward installing bidets in U.S. homes. Our hypothesis is that, while those who have tried bidets in the past may well be passionate about their superior cleaning experience, an insufficient number of Americans have seen a bidet, let alone tried one. The TP shortage didn't last long enough to get into true required behavior adaptation; it was only a concern about a potential future shortage. Therefore, people responded by hunting down every spare toilet paper roll they could find. The brief spike in bidet buying is more likely than not the result of people who had previously been on the fence now taking the “plunge” and using this push to get off the sidelines.

We similarly saw a spike in the trial of wet toilet paper usage, a market that has been unable to meaningfully grow beyond the niche group who swear by its use. In Steve's household, wet toilet paper was a short-term substitute. The Goldbach household was more than happy to see the Dude Wipes run out and the Charmin return.

While some may say hindsight is 20/20, we believe that understanding patterns of how humans behave and industries evolve is critical to forming hypotheses that should drive organizations to DO SOMETHING! earlier than they would otherwise. The trouble is that because of many “fatal flaws,” individuals and organizations fail to get to the starting line of forming these hypotheses about the future. In Chapter 3, we'll examine some of these human and organizational traits that create a narrowing of organizational peripheral vision leading to systematic blindness to emerging trends.