Strategy Lessons from Little Red Riding Hood

Stephan Sondheim, the brilliant writer of many great musicals including “Sweeney Todd, the Demon Barber of Fleet Street,” has some lines in his work, “Into the Woods” that caught my eye. Little Red Riding Hood is going down a straight path to visit her grandmother, a path she has walked many times before. However, a giant has altered the landscape, and she becomes lost. One of her companions suggests that they find another way, but she asserts that “my mother warned me to never stray from the path.” The companion replies, “The path has strayed from you.”

Most organizations have found success with “stick-to-your-knitting” strategies in which a single minded focus on a business strategy results in staple or increasing sales and profits. The team does not allow resources to be diverted from the job of always maintaining the offering and operation at a high level and engaging in incremental innovation to stay ahead of competitors.

The problem is that the path strays. Customers are no longer buying what you are making. No matter how good your offering is or how strong your brand, if you are making SUVs when customers are buying hybrids you will not be relevant. Or if they are buying a subcategory that has a “must have,” whether it be an appealing design like Volvo or motorcycle trip route planning as Harley-Davidson has developed, you will not be considered - even though your offering and brand are better than ever.

To avoid slipping into irrelevance, you need to detect when a competitor has created innovation that has resulted in a “must have” defining a new subcategory. Then, you need to defeat that new subcategory or create an offering that qualifies and achieve visibility and credibility for that offering.

Later in the play, the Prince, asked by the Princess (Cinderella) if he had feelings for anyone else, admitted that he did and noted that, “I was raised to be charming, not sincere.”

Too many brands have a charming but not sincere DNA, because their single minded focus is not on the customer but on increasing sales and profits in the short-run. Brand building will usually go better over time if there is more sincerity and less emphasis on charm.

Posted December 19, 2011 / Permalink / Subscribe (e-mail) / Subscribe (RSS)
Tags: branding relevance strategy

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Comments

Thanks Professor.

As I followed, we have to avoid investing on charming aspect of brand personality. Yet we know that "charm" has its own market, e.g. prestigious products. At the same time, based on some researches, being somehow "out of reach" creates value and satisfaction for customers.

Cindrella could have charmingly answered: "Im all yours"(?)

— Added by Mehdi on December 22, 2011

Mehdi, the point is that you need to have substance and sincerity behind programs and communication. You can be charming (with a fun personality for example) but not without substance and sincerity.

— Added by DAvid Aaker on December 31, 2011

Hi David, I was wondering whether with enough supports through research, an organisation could create something unique within its “stick-to-your-knitting” strategy? And still create a sub-category which has more relevance for its loyal customers as well as attract newer ones?

— Added by Shantanu Sengupta on January 3, 2012

Shantanu, the question is whether a focus on incremental innovation will allow the creation of new "must haves" that will define a new subcategory. Some fims have done just that.

— Added by DAvid Aaker on January 4, 2012