November 18, 2020

Why its good to make business improvements one step at a time

Woolworths was a staple high street fixture of a shopping trip in my childhood. Not the least of which was due to its confectionery pic n mix. A huge array of tempting sweets from which you could choose whatever you wanted. And a surprisingly large price when you took you little bag to the check out! But the sheer fun of choice was like nothing else and the smell – like being in Willy Wonka’s place…..

For several years I worked for a supplier to the pic and mix department. Which was a massive profit engine for Woolworths not to mention a store traffic driver. But it became the classic victim of the negative impact of incrementalism in business. Every year Woolworths wanted more profit from this fattest of cash cows. Problems elsewhere meant that this most successful of their departments had to give up more and more. They nudged the price up. Little by little. And given our dependence on the huge volumes at play they bashed us harder and harder for more and more margin (didn’t they @pete gilbert?)

Ours were some of the more expensive kinds of sweets in the mix and we saw the amount of bins we got cut to fewer and fewer, whereas cheaper sweets got more and more space. We had to cut costs to stay in the game, gradually cheapening the product. Woolworths pic an mix became cheap and nasty. Not in one go, but gradually, bit by bit. What was their crowning glory as a retailer and a reason to visit, eventually simply wasn’t. But each individual tweak wasn’t noticed. It happened with out comment. I am not saying this was the main cause of them going out of business. But it certainly didn’t help.

Incrementalism is a powerful force. As above, in the negative (and one of my former media managers once told me that they day you cut your ad spend is the day your brand dies because it can never go back up again), but also in the positive.

Some of the best business successes of our times are about the opposite. The power of incremental gains. Products that are created but then bit by bit in small modest steps they are made better and better. Many on line tools and websites are like that. They introduce changes bit by bit but all the while they become more effective and easier to use. Powerpoint for example, every revamp adds in some cool new features giving you more and more capabilities. Just wish they’d make the “full screen button bigger….. Many consumer goods benefit from a constant process of enhancement to maintain their lead over own label.

It’s the task of the CEO, the owner or the marketer to be the guardian of the long term health of the business. To resist the temptation of downwards incrementalism. To be advocates of positive incrementalism. And to be willing to make sensible modest steps to improve their core product for their core users and not always seek the big glamorous leap into the innovation unknown. This makes business sense too. Test and learn, don’t bet the farm on one idea.

We here are developing Sensecheck by getting a working version “out” then improving it day by day, tweak by tweak to make it easier to use and understand.

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