The mass, produced and marketed product is dead. This has caused an identity crisis for most companies as they lose their focus and simplicity of their offer to their customers. Believing the answer is more products with more features, they rush to find new growth opportunities from adjacencies. In the process they starve their core business, causing further commoditization and losing their identity with customers in the process. This leads to opportunities from focused competitors to offer a better core offering to the displaced customer and a loss of marketshare to the original leader. For proof, who had the best fast food hamburger in the US in the 20th century and who has it in the 21st?
The core mistake that companies are making, with the death of the mass produced product, is addressing it with more mass produced products. This increases the complexity in the mind of their customers and inside their company. It causes diffusion of brand, complexity in their supply chain and the bloating and lack of proper support for the business within their G&A functions.
To be clear, the economies of scale of the factories and global supply chains are not going away. To the contrary, their efficiencies are one of the causes of the death of the mass produced product. The problem lies in applying that methodology to the design, features, utility and marketing of those products.
At the same time, the world has gone through a tectonic shift. The present environment recalls past transition points—such as1815, 1919, 1945, and 1989. The global growth of the middle class is a cause-and-effect, tectonic shift, that for first time in history, the world’s majority population will not be impoverished. The nature of power is moving from a central to defused system in countries and companies as it is shifts towards multifaceted and amorphous networks that influence economic an political stability. Every year, 65 million people are added to the world’s urban population, equivalent to adding seven cities the size of Chicago or five the size of London.
US, Europe and Japanese global income will fall from 56% to under half by 2030. India will have the biggest share of middle class consumption in the world. Emerging Markets growth is forcing companies to place R&D resources in country.
Companies relatively easy year-over-year compares since the downturn are placing pressure on boards to put cash to work. This coupled with governments changing tax and monetary policies, will drive a global inflationary trend as the devaluation of cash and rise in prices of physical goods, furthers.
Most companies see these trends happening to their end markets and are stuck in the middle, causing an identity crisis that is distracting them from their core business.
The old consulting approach tailors products to address all markets rather than focus on a core. Trying to be all things to all customers, companies lose their focus, margin and market share.
Tame complexity and allow customers to curate.
Consumers want uniquely tailored experiences that enable them to curate a differentiated life. This shift in the marketplace has caused companies to try to be all things to all customers. Instead they need to focus on Strategy, Customer Segmentation, Product Offerings and their Organizational Structure. Business that provide this to consumers will win the most marketshare.
Stop investing in every market, sector and feature and trying to be all things, to all customers. Leaders need to shift investment back to the core business. Customers want to partake in the brand and product equity and infuse it into their own. Companies need to reorganize to enable their customers to curate. Eliminate the customer as the integrator and create the customer as the curator.
Data proliferation about markets and customers has created an ocean of data that no company can boil. Optimizes your company around the unique attributes that customers curate and that defines them.
In order to appeal to all customers, companies have filled their inventory with bland mass produced, feature-rich, simplicity-starved products that expect customers to decode the complexity of the offering. Design products that increase your market share and margins by taming the complexity of offerings to customers around what they want from you.
To offer multiple mass-produced, feature-rich offerings, companies have created internal structures that mirror the complexity of their offering. Valueless processes proliferate the organization and do not add value to economies of scale across products. Create organizational structures for the G&A functions that support business decisions rather than process for process sake.
Inspired simplicity is the essence of differentiation
Five Guys tames the frustration of finding the best fast food burger.
Apple tames the frustration of our electronic tools that manage personal information and entertainment.
India creates accessible money for all of its citizens.