Friday, June 25, 2010

Marketing Strategy: Two eyes, two lungs, one heart, one brain

Nassim Nicholas Taleb, author of "The Black Swan", argues for organising corporations more like the human body. The body has redundancy built in with two eyes, two ears, two lungs, two livers and so on. So corporations should have redundancy built in, especially today when their complexity and size increases the risk of failure and the world we live in is so complex that forecasts become more and more difficult.

This has made me consider how much redundancy needs to be built into marketing strategies for companies. We all know the dangers of reliance on one major customer: when things go well with this customer, your company can grow and prosper. But when the customer faces difficulties or suddenly a competitor threatens your relationship, you can risk losing so much business so quickly that your whole company might fail.

Now I work mainly with start ups and growth companies. Start ups begin by resembling single-cell organisms more than the human body; they do not have resources, either in time or in money, to build in redundancy; in fact they struggle to handle all the normal functions of a company.

But even they must think about what marketing channels to try and how to build out from the first customer. In fact, the necessity for them of trying things out and seeing what works gives them an experimental attitude which is ideal for identifying marketing and sales redundancy. It just requires that they do not stop when they found a suitable initial product set, marketing channel and first set of customers. They need to keep on experimenting to see if they can improve. Even if the pace of experimentation slows dramatically because of the need actually to service customers, they need to consider which of their early experiments were almost good enough and how they might improve them.

So for very small companies there may be less resources for building in redundancy, but a flexible approach and careful planning will mean that alternatives can quickly be put into practice if the main approach founders.

While building in or planning redundancy, it is worth noting that the human body has only one brain and one heart. Likewise companies need to have one core set of values and guidelines with one communication system to join the parts together.