Replace “Corporate Lore” with Real Market Knowledge

I recall a meeting that I had with a manufacturer of heavy equipment.  We had been involved in a planning session focused on how to compete against some pretty clever and effective competitors.  One of the issues had to do with pricing.  My client had been pricing against the best in market competitor under the belief that they were the number two in the product/market that they were targeting.  As a result, their pricing strategy reflected that of a challenger to the leader.

During the planning session this belief was not questioned.  It was simply accepted.  After all, they had once been a dominant player in the industry so that there was no real need to question the belief.  Because they were deploying Six Sigma Marketing to drive the planning process we were collecting market information not only about the client but also the different competitors.  The analysis revealed a couple of belief busting pieces of information.  Perhaps the most important was that they were not a challenger but a follower.  They were not the number two in the product/market but had slipped to a number four or five.  New entrants that were derided as “not worth paying attention to” had supplanted them.  Their quality had fallen and the price they were charging, based on their belief that they were number two, could not sustain a value proposition that was competitive.

In this same organization “lore” focused on a definition of quality and value that was limited to the product and product features.  “Lore” ignored the other factors such as product support, technical support, field and shop repair services, warranty support that the market included in their value definition.  “Lore”, in other words, blinded the organization to the realities of the market place.

This is an organization that relied on “lore” to develop its competitive strategy.  “Lore” is a traditional knowledge or belief.  As a youngster I was a member of Indian Guides that relied heavily on tribal lore to nourish its culture and belief system.  It’s fine for Indian Guides but “lore” has no place in corporate decision making.

“Lore” is the result of unchallenged beliefs that are allowed to continue and grow over time.  They are especially strong in companies that do not allow new knowledge into the decision making process.  Often “lore” is championed by someone who was once involved in the situation that created the “lore” and has the power to repel any challenges to it. It is particularly pernicious because it is like trying to compete by looking backwards.  It ignores the changing dynamics of market competition and the changing dynamics of market behavior.

Six Sigma Marketing (SSM) is an antidote to “lore” as a guiding information source.  SSM is a fact – based, disciplined approach to growing market share in targeted product/markets by providing superior value.  I emphasize the phrase “fact – based”.    SSM is based on the VOM (voice of the market) and how it defines quality and value and how it assesses the organization’s competitive value proposition.  It makes the buyer, current and potential, a partner in identifying, creating and delivering value.  Organizations that rely on “lore” and have no established link to the markets they serve tend to view value as an abstraction.  Moreover, quality can easily turn into conformance, having no real relationship to buyers.

Symptoms of “lore” can be found in several pat phrases such as”

• “We’ve always done it this way”
• “Why change a winning formula?”
• “Let’s dance with the one who brought us to the party”
• “This company was built on ….”

The new global environment and the competitive pressures on value identification, creation and delivery will place a greater emphasis on facts about your targeted product/markets.  What worked in the past may not work in the future.  What was right then may not be right now.  If your organization relies on “lore” it’s time to replace it with real information about your markets and products.

For a complimentary copy of my new book: Best in Market: The New Imperative for U.S. Manufacturing go to www.6sigmarketing.com and download the pdf version from the contact page.