A few days ago I'm standing on the long, underground, moving walkway between the Washington Reagan Airport terminal and the parking structure. I am looking at my suitcase the worse for ware after I don't know how many hundred thousand miles of travel, thinking it's time to get some new luggage. As I wheel my case off the walkway, one of its wheels collapses! I decided I would order a case on the internet, but before doing so would go to a shopping mall to see, touch, feel and judge the weight of various cases before I bought one on-line. In the end I didn't buy it on-line; I bought it from a wonderful salesman in the first luggage store I passed. I don't know if I paid more than I would have on-line. I bought it there because of the knowledge of the salesperson and the way he connected with me. But there was something else: the store had soul, and the salesperson had passion. The experience was energizing and not the chore it would have been on the internet. I learnt about trends and new technologies, fashions and forthcoming airline regulations. Using my real senses, I could more easily decide how much I was willing to trade light-weight for utility, and design for strength.
Why do I share this with you? Because I believe Borders and BlockBusters did not need to die, Barnes and Noble hopefully won't die, and that if brick and mortar retailers redefine their offering to include intangibles that cannot be available on the internet, they can thrive. If a retail business is just about the numbers, it will have a hard time surviving the post internet era. If however a retail business can, in addition to delivering its commoditized tangible, also nourish people's deeper cravings for connection, upliftment and dignity, it can carve out a new place for itself in the lives of its customers. The ways to do this and case studies of companies that have, are at the foundation of Lead By Greatness.
John Baldoni, in his excellent article What All Businesses Should Learn from Borders' Bankruptcy, traces the origin of Borders' sad last chapter to:
...1992 when Borders was purchased by Kmart and transformed into a national book chain ....In other words, Borders lost its soul when it became part of the Kmart fold. As hard as the employees of the store tried to keep it alive, this is not possible without the support and inspiration of senior leadership. (See The "Secret" Ingredients of Corporate Soul and Can corporate soul outlive its creator?) It is hard, if not impossible, for retailers without soul, to compete with the best of on-line alternatives. But retailers with soul will always attract the people who identify with their passion and value the intangibles of their offerings.
Sad to say, Borders' affinity for readers and authors never really resonated in its management corridors. As part of the Kmart family of companies Borders seemed a stepchild, just another property to merchandise. Combining it with Walden Books made sense on the books (pun intended) but not in stores. Borders was for book lovers; Walden was for customers looking for best prices on best sellers.
The challenge with building an intangible component to an offering is that it has to be completely authentic to the characters and beliefs of the leadership team, aligned with the company's culture and resonant with its employees' personal passions. If it is not, it feels hollow and lacks the energy behind it that it will need for sustainability. When a company gets it right however, its growth is unstoppable.The process entails the following four steps:
- Map the "Spiritual Fingerprints" of the leadership team. Spiritual Fingerprint is a term I use in Lead By Greatness for the unique value-drivers that inform the choices and decisions you make. We have mapped many thousands of these Spiritual Fingerprints for leaders around the world and have so far never found two that are the same.
- Discover the purposes for which each of the leadership team believes he or she was put in this world. There is something unique that you can do in this world, different from or better than, anyone else. Knowing what this is, helps understand what is core to you. Our process allows you to discover and articulate this purpose in a few hours of deep reflection and robust conversation. I do also describe this process in Lead By Greatness.
- Define your primary customer. Your primary customer, is the group of people or entities who can derive the most value from your tangible and intangible offering. Usually, your primary customer is not the obvious customer group you might assume, nor is it necessarily the biggest or most profitable customer segment -- as I explain in the book.
- Identify your set of unique capabilities. A capability is not a strength. A capability is what, using your strengths, you could do for your primary customers to satisfy their tangible and intangible needs in ways others cannot.
Two of these elements are personal to the leaders and two of them are core to the business. By fusing these four elements together, design the intangible component of your offering, plan its integration into the tangible component, and project the financial measures of executing it successfully. You will need to align your processes, structure and culture with this new strategy and develop leaders who know how to inspire its implementation and sustain its delivery. Because your strategy will have been built out of components that are unique to your leadership team and cannot be authentically imitated by competitors, the results are transformational. The customer connection you achieve will bear this out -- a connection not easily usurped by competitors either in brick and mortar or even on the internet.