[00:00:00] Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age. Hey everyone, Peter Crosby here from the Digital Shelf Institute. Folks, we live in a buco world, volatile, uncertain, complex and ambiguous. To thrive in this environment transformation
[00:00:29] by inches will simply not be enough. Leaps are required. Seven mind leaps, in fact, according to bestselling author Steve Dennis, his new book, Leaders Leap, Transforming Your Company at the Speed of Disruption, is a primer of the transformations leaders must make to be able to drive the vision,
[00:00:47] course and speed required to be remarkable. Steve joined the podcast to lay out the core tenets in his clarion call of a book. Steve Dennis, welcome back to the podcast. We're so excited to talk to you about your new book, Leaders Leap. Congratulations. Thank you.
[00:01:05] It's great to be with you guys. It really does feel like we are in a watershed moment in this world, across a lot of dimensions. But leaving a lot of that aside and narrowing in on commerce,
[00:01:17] there are a ton of forces at work that I think will lead to either irrelevance or disruption for many companies. And you've been pointing that out for a long time. Eventually people will
[00:01:29] listen. I think they listen. They just don't often know what to do even then. And this one really goes right to the personal responsibility for being a leader in that kind of environment. Your
[00:01:43] book is focused on what qualities leaders have, the strategies and mindsets that are at their disposal to be on the side of disruption. And one of the most important qualities that I feel
[00:01:54] like you have discovered in your work, and it seems like your life, that is a difference maker, is vulnerability. Which is not often a thing that people often in some organizations
[00:02:06] can resist that. And am I reading that right? And if so, why is it so central to your overall theme of being remarkable? Well, there's a couple of paths into that. One question that's been
[00:02:22] lingering for me for quite a long time has been if the world has changed so much, why have so many companies and why have so many leaders changed so little? And when I started this exploration, more specific exploration for this book, mainly what I came to was that
[00:02:42] most companies and most leaders I believe know that the world is changing ever faster, know that the world we're competing in is quite a bit different today than it was even three, four, five years ago and probably will be even more different going forward.
[00:02:59] Oftentimes they have great theories and strategies and transformation offices and all these frappings and processes and whatnot, but often not much changes. And so I wanted to really try to understand in my own personal experience directly working with clients, but also
[00:03:16] studying some companies, what were the root causes of that? And that got me to an exploration more of leadership qualities less about strategy per se. Also there's plenty of good strategy books,
[00:03:30] so I didn't necessarily feel that I had a really unique take on trying to write a better blue ocean strategy or something like that. And I think we have to take a hard look at ourselves
[00:03:43] in the mirror if we're really going to change ourselves. And I think as leaders, if we don't change ourselves, it's really hard to expect other people to change. So vulnerability, breaking through ego, being really honest about what we know, what we don't know, how some of our habits
[00:04:01] or preconceived notions or biases get in the way. I see that a lot in my own work, you know, very much my own experience, but also in working with others. So yeah, it's so you mean you've you've found out that people are human? Is that, you know,
[00:04:19] many people don't like to admit it. But yes, it turns out there's a few cyborgs that I've run into once I present a cyborgs. But yeah, and I think, you know, it seems like such a
[00:04:31] cliche to recognize our humanity and realize that we all struggle with all sorts of things all the time. It's just a matter of whether or not we really want to address it and be
[00:04:42] and really be present to that. So yeah, one of the citations that stood out to me was Alex partners that you have in your book, Alex partners disruption index study from 2023. 78% of the CEO surveyed indicated that their companies face serious disruption
[00:05:02] in the past year up 10%. And they highlighted a lot of concerning findings 98% say their business model much must change in the next three years. But 85% say they find it hard to know where to start 75% worry their organizations are not adapting fast enough. And it goes on
[00:05:21] and on with sort of these stunning levels of consensus on identifying the challenge and the fear, but really struggling with identifying the way forward. Is that as meaningful for you, I imagine? Yeah, I think those statistics are really compelling. A bane and McKinsey have often
[00:05:42] and others I'm sure have done studies that basically point in the same direction, some measure of transformations not working, but also this general kind of confusion or fear around, what do I do? How do I move forward? And getting back to the vulnerability question,
[00:06:01] I think part of that is being rigorously, rigorously honest with your board or your leadership team or the rest of your organization about when you don't know. I think at least the way I was brought
[00:06:14] up brought up but also what was modeled I guess in the corporations that I worked for was if you were the leader, you were supposed to have all the answers kind of never let them see you sweat.
[00:06:27] I alone can fix it. There's a lot of these things which is basically like I am the source of all power and kiss my ring kind of thing. And I just think that's a very, very antiquated style,
[00:06:37] not so terrific in general, probably for interacting with people. But I think it more specific to business results. You have to be willing to admit when you don't know what to do. You have to be able to bring more people in, listen to different voices,
[00:06:53] open the aperture on things they consider because the world is just much more complex and volatile these days. And I don't see any sign that it's going to get any easier going forward. It's probably more likely to get even more complicated.
[00:07:07] And Steve, I love the focus on the humanity of it because I think when people try to approach digital transformations, they try to check a box. And every brand I talked to, they're like, we checked all the boxes. And I'm like, it's not that that's the easy stuff.
[00:07:21] Like the hard, the hard stuff is the human elements. Why are we changing? How do you get people to change? And I love how you talk about that in your book and how you try to motivate
[00:07:31] people to think about those things. But that's not necessarily how people are trained to think about it. And I'm wondering from your perspective and your experience too, like, how can you
[00:07:42] as a leader, and even as someone who's reporting to that leader or as a part of a change, try to shift that mindset in that way to think about the humanity first and not the check the box?
[00:07:54] I think it's, you know, it's been curious to me that, and I'm very guilty of leaning on left brain more than right brain over my life. And I see this a lot, particularly as we become
[00:08:08] a more technology driven business or driven culture, that an efficiency is often important, particularly if the results aren't good, there's a tendency to go after the efficiency and the effectiveness of the very precise if this then this kind of mentality. And that can be hugely
[00:08:26] valuable. I'm not saying that that's not valuable. But if you look at the most successful brands, generally, if you look at the most successful cultures, they're generally pretty good EQ side, not just the ability to apply left brain thinking. So I think that's just,
[00:08:45] I feel like most people know that, you know, it's not that they necessarily have a fight with it. I just think it's easier to default to the left brain logic way of doing things. And lots of cultures tend to reinforce that, particularly if business gets tough, or, you
[00:09:03] know, we're faced with this world of, you know, Gen AI and cloud computing. And, you know, there's so many transformative things that are that are engineering technology driven. It's easy to lean on those. But I think the most powerful applications generally speaking,
[00:09:19] take a more human centered design approach, leveraging the technology for sure. I'm not suggesting we should get away from that fundamentally. But it's usually, it's usually the blend, even if you take a look at a lot of retail where we see a tremendous amount of success,
[00:09:34] you know, it's really easy to always point to Amazon, because they're so influential. But we see plenty of other brands like Abercrombie and Fitch, for example, which is, I just posted this on LinkedIn this morning, that if you ask what stock has gone up the
[00:09:52] most in the last year, many people would guess Nvidia, but Abercrombie and Fitch has actually had twice the gains that Nvidia has. On a slightly different scale. That's just, yeah, that's just a, well, yeah, it's just sort of a fun fact. But when you look at,
[00:10:08] and that's just one example, obviously, but if you look at some brands like Abercrombie and Fitch, it's not, their success is not driven by some technical tour de force that done some cool things, certainly with their e-commerce site and mobile apps and technology is part of what they're
[00:10:24] doing. But what's made things work largely takes place in their stores, largely takes place because of fashion and storytelling. And so I think it's that art and science blend that is often
[00:10:36] the thing that will show us the best results. It's so funny you say that I went into an Abercrombie and Fitch the other day because I went to them all and I was like, this is not
[00:10:43] how I grew up with Abercrombie and Fitch. And I actually bought a ton of clothes that I could wear for work because it's a totally different type of store now and I would not have known.
[00:10:52] And it was a great experience in the app and I got a coupon after purchasing. So I have to say, I personally experienced that and it was amazing. So I can see that change.
[00:11:01] It's also an example, which is something else I get into in Leader's Leap a bit, which is when do you realize that what got you where you are is not going to get you to where
[00:11:11] you need to go? And you know, Abercrombie and Fitch had some other issues that they needed to address that were less about strategic, but they very well could have held on
[00:11:20] to their roots. And a lot of times it's very important to stay true to the orages of the company and values and so forth. But also they really hit a wall as a company
[00:11:32] and have blown up quite a few things to get to that next level. So I think there's an important lesson there to really be honest with yourself. And I think that gets back to
[00:11:44] vulnerability to say, you know, is what's made us successful in the past likely to serve us well going forward, but also might get in the way. You know, because that's often what I say is
[00:11:55] it's not just that what got you here isn't going to get you there. It may actually be that it keeps you from seeing, you know, kind of all if you have her as all you have is a
[00:12:04] hammer, everything looks like a nail kind of kind of thought process. So Steve, in your book you talk about transformation and you say one reason meaningful transformation can be so hard is that up to a certain point change isn't transformation.
[00:12:18] It's nearly keeping up. That really resonated with me, especially in the e-commerce space because it changes so rapidly. So can you talk a bit about how brands can try to break that cycle
[00:12:30] and why playing it safe and to your point just doing the same exact thing over and over again is not going to get them to where they need to go and they need to take more of a risky strategy?
[00:12:41] Well, some of it I think has been and Tom Peters has been on this path for a while about talking about how stupid he thinks benchmarking at best practices are because
[00:12:51] some of that is you pick a best practice and then you try to adopt it. But by the time you've adopted it, whoever had that best practice is now moved on, right? Because
[00:13:01] generally can't do that overnight. It takes some time. So I think a lot of times when we're looking at performance improvement, we're doing it against the competitive set, whoever we aspire to be more alike. But that often just causes you to innovate what I call innovating parity.
[00:13:20] It's not giving you a competitive advantage. It may be worth doing sometimes just getting to those kind of table stakes sort of things can be hugely important. But I think the
[00:13:31] other thing which is more true in the last few years is because of how fast things move, if you're not really thinking about how to leapfrog competition, you just may get to a place where
[00:13:45] it really doesn't make that much difference. So often and people say I complain about this too I complain about this too much. But if you look at the department store industry, which has been in decline for close to 25 years now, and we've just seen results from
[00:14:01] some of the big department stores and they're going nowhere fast with anything they continue to lose ground. And some of that is they keep trying to incrementally improve what they think the basis of competition is, which at one level makes sense. If we have better products,
[00:14:18] we have better service. If we have more inviting environments, etc., housekeeping, all these kinds of return processes, all these kinds of things that seem like perfectly sound ideas. The problem is the reason they're losing market share is that their competition
[00:14:36] has a fundamentally better business model. So all these kind of incremental improvements you could make a lot of progress against them and they may not make any difference. Some of it I would say is forgetting that things are moving quickly and you often need a bigger
[00:14:53] step to actually have the customer even notice it. Some of it is you're sometimes chasing the wrong thing to improve where you're not doing the thing or addressing the thing that's really causing you struggle in the first place. Steve, do you find that this book,
[00:15:12] as you've gone around and had these conversations about the themes in your book, and I'm sure you were developing them and workshopping them out maybe longer before your book came out. But do you find what's the thing? Because what you've done is very cogently and
[00:15:37] efficiently brought together a bunch of different leadership principles that already exist in the world. And like you said, you didn't want to start from Luffy. Let me tell you something. But instead put it in the context of the personal change that might be required to
[00:15:52] actually tap into these things. What are you finding are the aha things that spark the shift that you're looking for? Does that make sense to the question I'm asking? Yeah. I don't know if this exactly answers your question. I think there are two things that have
[00:16:16] struck me. One is, and this is good and bad, one of the central themes in the book is identifying people's fear because I think it's mostly fear that keeps companies from taking the changes
[00:16:33] or making the changes they must. And I find some people are very, I don't say very comfortable talking about their fear, but are willing to say yes. I have, I can talk about my fears and some of
[00:16:46] them are rational, some of them are irrational, some of them are very practical kinds of things. Other people it makes them so uncomfortable that they will not even look me in the eye,
[00:16:57] which is really, I mean, I'm not totally surprised by that. But I think it has a lot to do with how we tend to look at what is the model of a successful leader. And that oftentimes is big egomaniac
[00:17:16] really comes down to it. And most narcissists and egomaniacs aren't really good at admitting that they're afraid, right? They're doing everything to protect, not to be too much of a psychologist here. But I think people, myself included that have struggled with this,
[00:17:32] they do everything to keep the fear at bay and not anyone see them. And so because we've idolized that in a lot of cases, it's very hard for people to break away from that. One of my best friends
[00:17:47] from business school, we've been on a pretty similar journey and a lot of respects in our career, including our personal life get divorced around the same time. And we've had various things lost our fathers around the same time. And he's so uncomfortable talking about his emotions.
[00:18:03] And I don't, you know, and I reflect on that because that was much more the way I was until 15 years ago or so. And I think this is very, you know, as a human experience across the board,
[00:18:15] but I think it's amplified by most leaders being told they're great. I've got this job because I'm so awesome. And, you know, what happens if I admit that I don't know what I'm doing or,
[00:18:28] you know, the thing with the Alex partners study, right? That was anonymous. It wasn't like, oh, you know, CEO of Amazon said this. So, so I think the fear conversation is really interesting
[00:18:39] because people either lean into it and say, yes, I see that. But here's the thing that I don't feel like is in my control and others even run away from it, which gives me my second thing, which I
[00:18:52] actually had more about this in the book, but we took it out for a bunch of reasons, and which I don't necessarily regret. But you know, it's really pithy to say, you know, everybody should transform everybody should take a leap safe as risky, like all
[00:19:05] those things are very pithy things to say, and I wouldn't include them unless I thought they were largely true. But at the same time, if you happen to work in a publicly traded company,
[00:19:15] it's not so easy. And sentence, not aligned for that. Right, right. I mean, even just to go back to the department store example, you know, this is my very unhelpful advice for most of the
[00:19:27] department stores, which is you should have started 15 years earlier. So we have a time machine. Thanks, Steve. Here's your check. Exactly. Yeah, yeah. I wonder I haven't gotten hired by Macy's
[00:19:37] or JC Penney. But I'll just use my rather than pick on them necessarily. I'll just talk about my experience at Sears now a million years ago. But what I've often said is that because people
[00:19:51] will say, oh, Sears could have been the next Amazon or whatever. And that ignores some facts of history. But what I've said is, okay, let's imagine that because I was the head of strategy
[00:20:03] and let's imagine that we have came up with a plan that was basically to emulate what Amazon ended up doing. Of course, you know, they didn't even know what they're going to do today. So that's
[00:20:13] also a little problem of the story. But just as far as being the online everything store, let's imagine that that was what we thought the best strategy was. And that's what we would recommend to the board. There is zero chance the board would have approved it. And the
[00:20:28] reason is very simple. It would have the plan would have required us to lose 10 to $15 billion a year for an extended period of time. And even if the board trusted that the management team was
[00:20:40] capable of implementing it, that was just not something that Wall Street would ever support. So the reality is a lot of times some of the bold strategies that are required as a practical matter
[00:20:55] can't be funded by a publicly traded company that has investors that didn't buy Macy's because you're looking for a moonshot to be the next invidion or something. You're basically buying it like a bond that's going to crank out some cash and worst case they get into trouble and
[00:21:11] liquidate the real estate. That's not a very aspirational kind of strategy. So I appreciate that is the reality for many companies that the degrees of freedom they have to do things more boldly are often limited. But again, partly what I hope is the positive story here as opposed
[00:21:28] to pointing out the negatives is if you first of all don't allow yourself to get close to the edge where your options become very limited. Secondly, look at the positive opportunities by leaning into all the changes that are happening. They don't all have to be these negative
[00:21:46] crushing forces. Like I don't want the motivation in this book to be you better do this or you're going to be out of business. That's part of the story. But the other part of the story is
[00:21:55] with all this change, if you really build in agility, if you're willing to take sensible risk, you can really create incredible future for your company. Yeah, let's focus on a couple of those positive stories because when you think of the brands and
[00:22:10] therefore the leaders at those brands that have successfully made some leaps, what are do you have any examples of brands that you think about that sort of embody the principles in your book? Sure. Well, outside of retail, one is and I use this example
[00:22:29] is Netflix and it's a great juxtaposition against Blockbuster because Blockbuster as most people would know had this incredible leadership position not all that long ago and now has one store for reasons I don't understand in Bend, Oregon. But if you look at Netflix,
[00:22:47] even though they're a relatively new company, they have made two major pivots in their short time. And I think a lot of that has to do with their understanding as much of a cliche as it can be,
[00:23:01] what business are they in? If they didn't define themselves by being a CD through the mail business, they defined themselves as providing entertainment in your home, which allowed them to see the streaming opportunity before many others did.
[00:23:14] And then they also started to realize that you could capture even more value by getting into production business. So I think that's one of the most positive examples of the last decade or so.
[00:23:24] But I think within retail, even though the home business is kind of tough right now, I think RH or the brand formerly known as Restoration Hardware is a great example of people remember what Restoration Hardware stores looked like 10-12 years ago, they were kind of these
[00:23:39] weird little gift tachy sort of stores with some home furnishings. And today their primary format are these gallery stores, which are 10 times as big, three times as expensive probably on a per square foot basis and has really defined the brand in a bunch of services, restaurants,
[00:24:00] that kind of thing. Now they're into lodging. So to me it's a kind of a classic lifestyle brand move, but that was a really big step forward for them. And I think to a certain degree it is the
[00:24:11] if we don't do this, we're out of business. We needed something bold and you know, may not be the best example of because I talk about crushing your ego very frequently. I know a little bit is hardly a ego less guy. So he's maybe not the best
[00:24:26] example of that particular principle, but he's definitely a good example of taking a leap towards thinking more radically about your business, getting very, very focused on the customer, what I call special not big, but really narrowing your aim and then aiming higher within that set of
[00:24:44] customers and solutions you're going after. And speaking of leaps, there are seven essential mind leaps that you talk about in your book in terms of how you have to navigate disruption. So
[00:24:56] we'll be able to cover all seven, but maybe top three in terms of mind leaps. If we could start with special not big would love to hear your thoughts on what are the key elements of that
[00:25:08] mind leap that brand need to make? Sure. So maybe just two pieces of quick context. One is that I call them mind leaps because I really think of them as being pretty, you know, here's one
[00:25:19] way of acting, thinking, believing and here's a quite different way. That's the mind leap part of it and is more of a mindset shift than it is kind of a process change or something like that.
[00:25:31] And then there really are two categories I would say of mind leaps. There are more of the strategic kind of principles and then they're more of the leadership values for lack of a
[00:25:40] better term. The idea of special not big is you know, I would never say never but I would say going forward trying to create what I often refer to as a peak of the bell curve kind
[00:25:53] of model, you know, if you get Amazon, you know, a little bit of everything for everybody, Walmart, a little bit of everything for everybody. I think it's just so hard today to imagine
[00:26:03] that you're going to be able to out Amazon, Amazon or out Walmart to so much scale and scope that any company has to go after. So I think the key and this has always been true about
[00:26:14] any good specialty retail or any kind of specialty brand of any kind, you know, whether we're talking about a hotel restaurant is to really figure out who it's for in a much more specific way.
[00:26:26] Really narrow your aim and then kind of boost the signal. And so special not big is really thinking more as my friend Seth Godin often talks about is trying to find that minimally viable audience that you can really serve especially well and that branch out from there.
[00:26:44] Because in a world where we have so much choice and so much noise, how do you actually get noticed? And if you're just kind of casting the widest net with a little tweak,
[00:26:53] you know, that may get you some views on TikTok or something. But in terms of building a sustainable business model, it's really hard. So narrowing your aim, understanding your customer in a really deep way, meeting their needs and wants and desires in a powerful way.
[00:27:08] That's kind of fun and want to leave, but special not big is about the caveat. I would say is just because it's a special not big sort of strategy doesn't mean that you are setting yourself
[00:27:20] up to always be a small business. So one of the examples I point to in the book and I love talking about because I think they're a great company is tractor supply. You know,
[00:27:29] tractor supply has a very clear idea of who their brand is for and who it's not. And the assemble the sort of things that what they call their life out here customer wants. And that allows them to be very competitive,
[00:27:43] despite being in a lot of categories that very big players, your home depots and the pet supply guys are in. But because they have that narrow focus and go deep, they really are solidifying that
[00:27:55] that customer base. And it just turns out that that customer is a big enough customer base that they can actually grow to quite a large number of stores. And now they're a multi-billion dollar business. So it's not necessarily that it's a
[00:28:06] fundamentally small opportunity or a segment niche kind of opportunity. It can be quite big, but the key is that you're not trying to cover too much of the landscape. So do you think the future of that thinking for the larger global brands
[00:28:25] is focusing much more on a bunch of niches and that the whatever multi-billion dollar brands are no longer sort of possible to develop or in this kind of new way that consumers discover and buy?
[00:28:44] Do you feel like that's really the future, or are we already there? That's what's happening. You are. It's a little bit, I guess, of a definitional issue as to how big you can be.
[00:28:55] So for example, in the athleisure space, I think one of the most interesting brands right now is Viori. And you could argue it's a bit of a niche because it's athleisure and it's mostly a men's business. But there's always interesting opportunities in very, very large categories.
[00:29:16] So athleisure is big enough and what Viori is doing is different enough that I think they can build a multi-billion dollar business out of that. But I think for most people, I mean when you really
[00:29:28] think about how many brands are a billion dollar plus in revenue, it's really a fairly short list. So part of what I'm trying to do with this business, for the most part, I work with
[00:29:41] bigger brands and so there is an aspect to which my advice is derived from working with big companies. But I think for a lot of people reading this, the key is not to chase your tail
[00:29:53] and not to think, if you can find a powerful enough intersection between purchase occasions and type of customers basically and really create not only product differentiation but that emotional connection, that could be a 10 million dollar business, that could be a
[00:30:11] multi-billion dollar business. It's just really trying to make sure that your aim is narrow enough that you can really differentiate yourself in the market. And I think just going back to the department stores, since I can't go more than five minutes about picking on the department stores,
[00:30:29] when you look at what they're trying to do, who's the customer? It's a little bit, it's a bunch of stuff moderately priced, but who's the Cole's customer? Who's the Macy's customer? Like you can't, whereas when you think about who's the Lululemon customer, who's the RH
[00:30:45] customer, who's the tractor supply customer, you instantly have a pretty good idea of who it is because they're meeting specific people's needs in a powerful way. Just turns out there's
[00:30:57] a lot of them out there so it ends up being a pretty good sized business. But the main thing is just that clarity of focus. And also another part of this is this idea of editing the amplify.
[00:31:08] It's very hard in a world, an endless aisle type of world, where in a matter of seconds I can be racing around the internet to find a particular product. If you're basically selling the same version of something that a million other people are, how is that a business?
[00:31:23] Yeah. And that really takes us to the next one, the next mind leap, which is you call it start with wow. But I feel like those issues of emotion and what can you differentiate on and amplify that differentiation, that emotional connection with the consumer is kind of underlying
[00:31:41] that sort of pity start with wow. Did I take that incorrectly? Well, yeah. No, I think you've got it. So the way special, not big and start with wow work together, one is aim better and the other is really aim higher. And so finding one, two,
[00:31:57] three things that you can really differentiate yourself on in a sustainable way, not just a gimmick, something that could easily be copied is super important. And a lot of this is just how do you become the compelling signal amid all the noise? When we have so much choice
[00:32:15] and it's so easy to search, if all you're doing is kind of going out on spec on the internet, particularly as AI search really becomes a thing, it's gonna be super easy. You just type in,
[00:32:27] find me the best code to go on a hike to Patagonia, that's less than 100, whatever. Like that's the search world we're going to be living in very quickly. And so if you're just
[00:32:38] providing something against a spec and then the deciding factor is how fast can you get it, which in most cases now is 24 hours or price, well then you better be the low cost provider.
[00:32:53] That's why I say, you're not gonna have Amazon, Amazon or Walmart like the Carcassco. Some of these companies have got so much scale that if it comes down to basically commodity type product
[00:33:03] at a great price where at this point, I think delivery time is becoming less of an issue than so many companies can deliver very quickly. What is that, what are the set of differentiating factors? So some of that can be unique product attributes, unique service attributes, it can
[00:33:21] be the emotional connection. I spent a bunch of time in my first book and in this book that let's just be honest, a lot of times we buy for emotion not for product differentiation, the bottle of water that is a dollar versus five dollars,
[00:33:36] most cosmetics, most people can't tell the difference between them but there's why, price differences. Why? Because I'm the sort of person that buys the five dollar bottle of water or the
[00:33:46] 50 dollar bottle of wine, not the cheap stuff or I always buy the cheap stuff because I'm not an idiot, why would I just getting ripped off by marketers, right? So that's another aspect
[00:33:58] of that right brain aspect of is that emotional connection. People like us do things like this that's also important to build up. So there's really a fork in the road, I think of whether
[00:34:10] you're going to kind of go down the commodity all about price, all about convenience aspect or you're going to try to build a wow experience which is based upon both tangible benefits, well it could be the mix of tangible benefits and these intangible benefits which is more
[00:34:26] about the storytelling and the affiliation and belonging kind of attributes. And one of the examples you mentioned was Canada Goose. Can you just give us like the two minute log line on that wow experience they've created? Well, the specific thing I'm talking about is
[00:34:44] what they've done with their fitting rooms and I think Canada Goose has done a number of things to build a pretty amazing brand and charge very, very premium prices. One of the things
[00:34:55] I really loved for a number of years is they created these cold rooms which are basically like a walk-in freezer as a dressing room and what it does, there's sort of the gimmick value of it
[00:35:09] and then there's the real useful value which is because they're trying to convince you to pay more money for a very expensive coat part of which is fashion but a lot of it is the functional
[00:35:20] qualities or at least the rational, the way you talk yourself into buying it as it keeps me much warmer. Though it's got the little logo on it and paying a lot for that $3 patch.
[00:35:31] But you basically get to experience the product in the environment in which you're going to wear it so as opposed to going to a regular dressing room and throwing on a coat and seeing if it
[00:35:39] fits and that's it. You get to experience how warm it keeps you in the environments and temperatures you expect to be in and so when they've added these stores, they've seen a dramatic increase in conversion but they've also seen a dramatic increase in average unit retail
[00:35:56] that people are paying up for the more, they're trading them up basically to the next level because of the worth qualities. But of course people take pictures and it ends up on Instagram and TikToks and all that kind of stuff too so it's a little free marketing.
[00:36:11] A social moment. Yeah you said when you wow you don't have to pay for attention you earn it which I thought was pretty cool. Well it's not a new idea that word of mouth marketing is
[00:36:23] tends to be the most powerful but again I think in this world we're in and it's not just about, I mean it's important I think to realize the influence that influencers have and how important TikTok and some other social media have become but I think the underlying thing
[00:36:42] other than the gimmicks of trying to try to figure out how to make something go viral is to build that emotional connection and do something so remarkable that you know it's literally what remarkable means right is that people will remark upon it and that's really
[00:36:56] the X factor I think with lots of brands. It's one thing to satisfy needs or give somebody a high score on how fast you were approaching the store or how friendly the customer service
[00:37:07] person is but at a certain level we expect friendly sales people right that's not in itself a wow it's somebody who was above and beyond or just something that's so unusual and meaningful
[00:37:19] and positive that we're willing to spread the story of your brand. And you talk about finding your 1,000 fans you don't need the 500,000 fans you just need the loyal group of people and can you identify them who are they and they will spread the word so much more than
[00:37:36] having 100,000 people who just kind of know your brand so I think that's a good challenge for brands to find those fans and understand what they want. Yeah starting to interrupt just
[00:37:47] one quick thing on that I find a lot because I work with a fair number of early stage companies and I think the natural bias because you're thinking about wow I'm trying to get investors and they want a big exit and you talk about the total addressable market
[00:38:02] and you want that to be as big sounding as possible but I think the problem with that when you get started is you cast too wide a net in your thought process and particularly when you're
[00:38:14] early on what you want to do I think is find those perfect fit customers kind of the center of the bullseye. I don't love the bullseye visual but but but I think you know who's really
[00:38:27] at the heart that people that really really love you that this brand has been built for now you may find whether it's a thousand or five thousand whatever the number is you know it doesn't necessarily mean because you can find those thousand raving fans that
[00:38:45] you can build that into a much much bigger business but I think designing something that is really a wow for a set of customers helps you get that momentum but if you're not quite hitting
[00:38:58] the mark it's easier to understand okay well what is it that's not quite resonating with them so when you think about iterating through your your you know proof of concept or whatever might be your
[00:39:09] original pilot it's a lot easier to understand how to address something with a more narrow audience than to say well we want this to be a billion dollar exit so I've got to be thinking about
[00:39:22] you know having 100 stores or having so many registered users or whatever it might be. So Steve last but not least let's tackle think radically in terms of how brands can kind of remove the boundaries from their thinking and try to think more radically what would your
[00:39:39] best piece of advice be there? Well a couple things one is as an exercise I think and I talk about this a little bit earlier in the book opening the aperture and kind of doing the work and what I
[00:39:51] mean by that is I've seen a lot of companies that either get blindsided by innovation or don't see opportunities early enough because they're they define their business too narrowly so you
[00:40:05] know if I'm in the you know again I'll pick on the department store you know I'm in the department store business what do that mean I mean all these categories I'm in these big stores I'm in a mall
[00:40:14] that is the business I'm in and you know that has allowed TJ Maxx and other people to steal a ton of share from the department stores because they really redefine you know
[00:40:26] somebody just wants to wear an article clothing and look good right they're not that hung up on where they happen to get it from. Ulta in the cosmetics business has gone from being a handful
[00:40:35] of stores 20 years ago for like 1400 stores and one of my favorite statistics is that the that Ulta is worth more in market capitalization than the top five department stores in the US combined despite only being in 10% of the product categories but that's because I think that
[00:40:57] Ulta really defined their business in a different way from the beginning very focused department stores where we've got to be in all these things and so they just created these opportunities so some of
[00:41:08] that is just definitional spanning your view but I think I think the biggest way to get there is this idea of focusing on what's the ultimate result that the customer wants
[00:41:23] and in some cases that can be very defined by product but it also can start to bring in services so you know if you think about what the customer is trying to achieve
[00:41:37] you know perhaps you can solve in a different way so the couple of non-retail examples I use in the book are if you think about Uber or Airbnb you know they didn't create in Uber's case a
[00:41:49] better taxi or in Airbnb or Vervo's case a better hotel they provided a different way to get from point A to point B in Uber's case and a different way to experience a city through where you stay
[00:42:03] right and so therefore they weren't defined by this kind of incremental thinking of well you know if I want to if I want to create an opportunity for Airbnb it wasn't well let me
[00:42:16] fix what's wrong with hotels you know they could have a better bar they could have bigger rooms or more comfortable mattresses you know that wasn't the incremental kind of thinking it was how do I unleash the power in a fundamentally different way and in both those cases leveraging
[00:42:32] technology was technology that enabled the ability to deliver what they did because they weren't in the business of building hotels and operating hotels and finding investors for the real estate you know it's just a fundamentally different approach to solving the bigger problem
[00:42:48] or bigger thing that the customer wanted. Steve this reading your book was was so edifying and as we close out I just want to run one thought by you as I was reading it I was thinking that
[00:43:05] you know commerce like many other things that involve transformation and is a collaborative venture create brands to bring them to market to you know make them work to iterate and certainly to transform requires a shared sense of purpose and and at least a way to drive towards these
[00:43:26] things these leaps that you're talking about and in some ways I felt like but ultimately every one of our listeners are responsible ultimately responsible for their career and so I really read this book as a way to get a set of principles and perspectives where after
[00:43:48] reading it you can sort of sit back and say am I at the place and among the people that are capable of doing this because that's within my control unless you're the CEO or at somewhere at that
[00:44:04] level the rest you can influence but I kind of and does that does that make sense and and if people read it with that and at least took took this to heart for controlling their sort of
[00:44:16] future would that be a win for you? Yeah I've said to a couple of people over the last month or so that you know if you are I mean unfortunately I think it is the case when
[00:44:31] it comes to strategic transformation for the most part relatively few people in an organization can really make that happen like you say you can influence it you can be aligned behind it you can support it but for better or worse the strategy is driven generally by the board
[00:44:48] the CEO and maybe a few people in the senior leadership team and you know if this book is helpful to those people that's fantastic I think if you happen not to be in that in that
[00:44:58] role I think there are a few things one is be intensely curious I think that will serve you well open the aperture you know be a sponge for new information because I think more and more
[00:45:11] and it's always been a good idea but I think as other things come into play in leading our careers and being successful that's important you know be as courageous as
[00:45:20] you can which is I know easy to say you know I appreciate that at my age and with some of the privileges I have it's a little easier for me to say that than 30 years ago when I was worried
[00:45:29] about paying my mortgage and having some money to send my kids to college and whatever and then I think it's really you know be as bold as as you can and if you're not in the right place
[00:45:43] fundamentally I mean I wish I had left Sears earlier I can tell you when I look back at the 12 years I spent there selfishly it would have been better for me to have left much earlier
[00:45:56] but I was afraid to do it and I guess I convinced myself I was I was learning a lot but deep down I knew that it wasn't a place where I was going to be able to do my best work and it was a point
[00:46:05] at which I realized this place is never getting turned around now finally I did and I left so that's easier said than done sometimes but you know I think most organizations if they're not aligned
[00:46:18] to your values and they don't allow you to do your best work and you're fundamentally frustrated it's probably good to to move on well I think all of us in in these times of disruption which we
[00:46:36] are clearly in to be able to have some reminders and and some personal inspiration that you shared to to drive that thinking to like where do you want to put your energy and where can
[00:46:47] you find people like you I think it's a really important and timely conversation and so I would encourage anyone that wants to sort of have that journey to look for Leader's Leap and Steve do you
[00:47:01] have a favorite a favorite place that you like to send send folks to uh to do their shopping for your for your book well uh my publisher wants me to say amazon because of their influence
[00:47:15] but I would actually encourage people to go to bookshop.org they are a platform that supports independent booksellers and I'm I'm sure the various small booksellers around the world would be happy to have folks business fulfill that order uh well again the the book is Leader's Leap
[00:47:34] transforming your company at the speed of disruption aim higher move faster make the leap to remarkable so Steve thank you so much for for just sharing your your thoughts your output your advice on the podcast we really appreciate it. Well it was great talking to you thanks for
[00:47:54] having me on. Thanks again to Steve for sharing his insights while you're feeling inspired swing on over to digitalshelfinstitute.org and become a member thanks for being part of our community.