February 26, 2016
It is often said that campaigns work in poetry (beautiful language with lofty ideals), but one governs in prose (the pragmatic workings of the day). If we are in a poetic state, this is one strange poem with little rhyme or reason.
However, there are common threads that are meaningful that tell us something about not only the election but also the business climate.
- The joint venture between the electorate and the disruptors. There is a lot of chatter about how angry everyone is, but studies have shown that the electorate is no angrier than in past elections (Washington Post — ABC News Poll). So why is anger a central theme? Because the anger can be effectively channeled (and riled) by disruptors (e.g., Donald Trump). In the past, anger has been one of many emotions that have played a minor role in deciding elections; so far this year, there is a powerful joint venture between the angry electorate and disruptors who are able to animate and amplify that emotion. As we sit here today, anger is a force of nature. This joint venture has direct parallels to the business world. Let’s use personalization as the example: the expectation that companies can deliver personalized experiences that can anticipate individual needs and wants. Consumer frustrations have been brewing that companies cannot harness data and analytics to deliver personalized services. Customers are repeatedly asked for the same information touchpoint after touchpoint. Customer interactions with a company don’t become part of the corporate knowledge that helps form personalized experiences, and predictive analytics manifest in an endless set of new offers that barely represent individual needs. That frustration is inert until disruptors bring it to life by delivering truly personalized services and by showing it can be done.
- Established players adapt or perish. This election is different. Norms that have governed elections only partly hold; new rules are being drawn up on the fly by the electorate and disruptors. The tried and true narrative was that Trump was going to fade when the campaigns moved from the “silly season” to real policy debates. Why did the establishment hold onto this narrative almost to the point that they are virtually helpless in responding? Because change is hard; people are stubborn, and few see the consequences of not changing before it’s too late. In a similar fashion, customers and disruptors enabled and empowered by technology are recrafting market fundamentals. Whether driving disintermediation between established firms and their customers, winning share of wallet, or forcing industry rethinks, the market is undergoing some serious changes.
- Traditional players can combine longstanding strengths and disruptor play. The entire election is not upside down. Endorsements matter (well, some). The ground game is still essential. Policy positions mean something. Strengths in these areas are just that: strengths. But these strengths have to be applied in a changed political arena: compete on what can appear to be random personal attacks; take highly emotional positions to reclaim the press’ attention away from barkers; deal with electrified anger; rapidly adjust advertising; and adopt advertising channels (like Pandora) to engage the electorate where they live. The goal is to adapt to new rules while leveraging longstanding strengths. Disruptors have speed because they are not anchored to the past. But in the same breath, traditional companies can leverage assets and capabilities such as data, sales channels, and scaled operations — assets that disruptors simply do not have. It’s the combination of the two that can create enormous power. Scaling and building assets is hard, expensive, and time-consuming. Making the cultural and operational changes to be customer-obsessed and truly fast in the market is also hard, expensive, and time-consuming. The question is whether traditional companies see both the threat of change and the enormous power of taking a page out of the disruptor’s playbook.
This election is one for the ages: I laugh; I cringe; I wonder how this will play out. But among all the sound and fury, there is a small nugget of wisdom; you just have to squint and look real close.