Crossing the chasm

Picture this. On the one side of a chasm is your business. On the other, the people you would like to do business with. Most teams developing a business strategy spend the bulk of their time examining what the business can do to build a bridge that will reach across the chasm to the people on the far side.

There’s only so much that core competencies, Swot (strengths, weaknesses, opportunities, and threats) analyses and positioning can achieve. There’s a limit to what industry and competitor analysis can provide. They are essential, of course, and must be rigorously done. But relying solely on them is like trying to build a bridge from your side of the chasm only. You’re building what civil engineers call a cantilever. The foundations will require bolstering; the span will require extra concrete and reinforcing. It’s not an efficient or an elegant solution to the challenge at hand. And you may not succeed in getting the thing to the other side.

An important source of strength for the strategy lies in asking the question “what problems can you solve for a particular sector of society?” The better you understand those problems, the better you’ll understand the solution. 

Your business strategy should start by building the bridge from your customers’ side of the chasm. That way, your business’s intrinsic offering can be developed and modified to meet the span coming towards it. A business strategy is a bridge between a company and its customers and needs to be built from both sides.

Of course, it helps when the problem you’re solving has not been solved before. But what happens when your business is not solving something new? When you’re not Google but the 100th company in a commoditised, competitive industry?

Add extrinsic problems and solutions into the mix

When you’re operating in a commoditised industry, the challenge you’re solving is no longer a functional one. That’s been taken care of – the intrinsic offerings have been developed and will continue to be improved. What is important now is to look at the world your customers live in and get to know them better than they know themselves. When you know what problems your customers need solved, you’re well positioned to solve them.

Your product has a valuable opportunity: to offer them something extrinsic. Something “outside of itself”. This is when the brand steps up to the plate to solve a personal as opposed to a functional issue for your customers.

To illustrate how the intrinsics of your business and the extrinsics of your brand combine to build a bridge, let’s take a look at Nike. Nike is one of the world’s great businesses but it’s not as if it invented running shoes. From day one it has operated in a commoditised, competitive industry.

Nike arrived on the scene with an intrinsically good product – the innovative Air Sole. However, if Nike was going to create customers by the million, what meaningful contribution could its brand make to its market? If Nike was going to sell truckloads of shoes it needed to inspire people to put the shoes on. Star athletes needed to feel that Nike understood their quest. Lazy so-and-sos needed the motivation to get off their butts. In other words, a large part of American society needed to feel excited about being physically active.

That insight became the bridge coming across the chasm towards Nike. It became an integral part of why it was in business. And the heart of Nike’s business strategy became this twelve-word statement: Nike will bring inspiration and innovation to every athlete in the world.

Some people will call the statement Nike’s purpose. I see it as the business and brand strategies informing each other: the extrinsic and the intrinsic. The twin strands of Nike’s DNA. It has been at the heart of Nike’s long-term competitive advantage. From day one, inspiration and innovation are what Nike has contributed to society. Consistently.

In fact, when you stare at the twelve-word statement, perhaps there is a reason why inspiration comes before innovation. Perhaps Nike’s real value to society is its extrinsic contribution. The inspiration. Perhaps its shoes are secondary. Just a way of doing it.

Most businesses are good at the intrinsics. They are good at telling us who they are and what they do. But they are building towers and not bridges. Their fortunes improve when they cross the chasm. The better-off a company makes society, both intrinsically and extrinsically, the better-off its shareholders will become.

The big take-out: If your brand is going to make a meaningful contribution to consumers, the intrinsics of your business and the extrinsics of your brand need to combine to build a bridge between you and the consumers.