Several years back, I attended a business meeting with the former CEO of Coca-Cola, Henry Schimberg, who told me a story that illustrates how a minor tweak to thinking can have a very big impact on business. Henry is a highly engaging story teller, so I will do my best to do his business parable justice.
Back when he was with Coca-Cola, Henry was presented samples of new packaging for one of the company’s very important beverage products. The presentation was given by a project team in a very sleek, all-white room.
The packaging, as presented, looked modern and gorgeous.
The project team felt they had delivered a winning design. Most of the attendees in the room were suitably impressed, as well.
However, Henry broke up the self-congratulations by asking one simple question: “How does the package look on the shelf?”
On the shelf? The team didn’t understand.
Henry explained that the Company’s products were not sold in gorgeous, stark white rooms, but rather on crowded store shelves. What the package looked like in the environment where the customer was actually going to buy the product was absolutely critical to its success.
The bottom line was that the packaging and project team members hadn’t tested the package in any store or even on a mock-up of a shelf, as that context never even crossed their minds.
Henry grabbed the package and had the team follow him to the nearest major grocery store. In the store, they received permission to play around with the merchandising in the beverage aisle and the team followed suit.
The gorgeous new package was put onto the crowded shelf. However, when flanked by umpteen other beverage products -- instead of sitting alone in the middle of the white room -- the package didn’t stand out at all. In fact, you as a customer would barely notice it.
Needless to say, the team went back to the drawing board.
This underscores how context can completely change the outcome of a seemingly great idea.
It also shows how important customer perspective is for every function within an organization.
Henry is not the only successful business person to know that tweaking your thinking on something small can have a major impact on your business.
As relayed to me by a former CEO of an Australian company, there is a well-known buyout investor in New Zealand named Graeme Hart, who is the chairman of Rank Group Ltd. and who is reported to be the wealthiest person in New Zealand. According to my source, in the early 1990s, Hart was evaluating the purchase of a major bookstore chain that was part of Whitcoulls Group and decided to head with a colleague into one of the stores.
They were in the bookstore for no more than five minutes when Hart left. The colleague followed him outside and Hart declared that he was going to try to purchase the chain.
The colleague was baffled, as they had barely been in the store a few minutes. He probed Hart on how he had come to a decision so quickly.
The answer, Hart said, was easy. He explained that the store was merchandised like a library, with the books lined up on the shelves with their spines facing out, one after another. Nobody could see the covers! He told his colleague that all he had to do was take the books, change their orientation on the shelf so the customers could actually see what they were buying, and he guaranteed sales would improve.
As the story goes, he bought the chain, had the books turned to show the covers instead of the spines, and sales increased immediately and significantly. This sort of subtle-yet-keen insight has allowed Hart to amass a reported $8 billion fortune.
It's important to challenge traditional thinking. Are you evaluating your business in the middle of a sleek and stark white room, or have you really thought about things from the customer's perspective? Can you look at things in a slightly different way in your business? It may have huge rewards, just like turning books on the shelf did for Graeme Hart.