If James Champy wasn’t the chairman of Perot Systems’ consulting practice and a best-selling writer, he’d probably be a motivational speaker. And his latest book, Inspire!: Why Customers Come Back, which he launched at the recently- concluded Nasscom summit in Mumbai, only reiterates that. The second book in a series, it talks about what can still make your customers “stick” to you and how some companies are able to hold on to their customers in very unique ways, particularly in tough times. While his first book Outsmart! focused on strategies to consistently outsmart competition, this one is about values, such as “authenticity”, that help decide on customers’ loyalty. Champy, recognised for his work on leadership, management, organisational change and business reengineering, spoke to Byravee Iyer on authentic, consistent selling propositions customers are passionate about. Edited excerpts:
What led you to write your latest book Inspire?
Inspire, the second book in a series that I’m doing, is about new business models, of how companies are operating in fundamentally different ways. The first book was a strategy one about where ideas come from and how companies are implementing those ideas. On the other hand, this book speaks of business from the customer’s perspective. It’s about why customers come back and of companies that are able to hold on to their customers in very unique ways. I think it is so important today, in times of recession, to have companies that know how to hold their customers and grow in recessionary times because they are operating better than their competitors. So I wanted to write about companies that inspire, which is where the title of the book came from.
You’ve included several examples in there of lesser-known companies. Why’s that?
There are some very rich examples. One of my favourite stories is that of a company called Honest Tea. In my research for the book, I looked for companies that had not been written about. I didn’t want to write about Google or Microsoft. Honest Tea’s story is that of a company that is very authentic — its description is really appropriate. It was built by a young entrepreneur who recognised that most drinks in the United States are filled with lots of sugar and high calories. On researching, he discovered that there was a lot of sugar because the quality of the tea was very bad. Thus, his business model was simple: To make very high-quality tea that did not require as much sugar. He went on to build his product and the entire business on this conviction of purity, health and honesty. It’s a very inspiring story. A common characteristic of all the companies in this book is that they are authentic.
Is authenticity missing in a majority of companies today?
Often times, in marketing, the campaign never represents the company for what it is. A lot of it is false. The primary characteristics of the companies in my book are based on how authentic and truthful they are. That is very important to consumers who are not fooled any longer. One of the big changes is the way information about the quality of a product or service moves around. In the United States, if you want to buy an automobile today, you don’t go and listen to what the dealer has to say — you listen to what other consumers are saying on the Internet. There’s no avoiding the truth about the quality of your product today.
How do you pick the case studies in your books, considering we don’t see big names in there?
I pick companies that have high growth rates. Even in these times, every one of these companies has been growing at double-digit rates for two or three years now, perhaps even longer. That’s the first filter — because that signals to me that they are doing something. Next, I look to see whether the companies are operating in some fundamentally different ways. In the last several years, there have been many companies that have grown just because the markets have grown. They weren’t doing anything special. The ones that I have picked in my books have all operated in some different way. And last of all, I keep an eye out for an interesting story, such as Puma.
How come we don’t see Indian companies in your book?
I should write about an Indian company in one of my books. For my third book, I will find an Indian company. But I did write about a German company, Puma, as I did not want to write only about American companies. Besides, Puma is a wonderful story, of a company that had really fallen on hard times, not performed and had to completely rebuild its brand image. What’s more interesting about Puma is that it did so not by taking on its competitors directly, because it couldn’t go head on with Nike. Instead, it rebuilt its image on a notional side and did an incredible job of reviving itself.
I think Indian companies tend to be more reserved about how they represent themselves. I actually think they are honest and authentic but they are certainly more reserved in their promotional system. It is probably a cultural thing. Having said that, one could argue that Indian companies are better prepared to be authentic, because they don’t misrepresent themselves.
At such a challenging time, what are some of the more critical things companies should do?
The value you deliver to consumers becomes the most important thing. If you want to continue to hold on to consumers, you have to continue to deliver value. In recessionary times, while you do have to be low-priced, you don’t have to be the lowest-price provider. Your customers have to believe you are delivering more value than your competitor. How you deliver value is the most important thing right now.
The other thing that is important is to recognise that all your customers will want more for less. That means that your company has to learn to deliver more with less. That’s what strategy is about. And that is perhaps one of the challenges Indian companies will face, because to a great degree they don’t do that and compete on the basis of price. That’s not sufficient in such times, especially in the information technology space.'
A word of advice to Indian companies…
Ambition. Also, focus. I am a strong believer that the best of companies have a very strong focus in the market. Many Indian companies, particularly the big ones like Tata, are in 20 or 30 businesses and it’s very difficult to do that well. So one of the lessons for these companies is to stay focused on the markets they know very well. The third would be to look out for unmet customer needs. Find out what these are and build your proposition around it. That takes a lot of engaging and understanding of your customer. The fourth is, of course, authenticity. Today, well-run businesses are a combination of people, profits and technology. It’s also important to remember that although this recession is likely to be lengthy, we are going to come out of it, the sun will rise tomorrow, and so, just keep your capabilities in place. The good news for India is that it is still growing and is in a very fortunate position, unlike the United States. Also, India serves local markets, unlike China which relies heavily on exports. Of all the countries I know, India is the best-positioned. The best thing for Indian companies to do is not retract and stay ambitious.
Was it a deliberate decision to launch your book now? Also, why at the Nasscom summit?
Hard times are the best times. I think businesses are changing more dramatically and I wanted to write about that. Besides, there is nothing new to write about in management, what’s different is how companies are operating and how they can operate today because of technology and the ambition of people. I’m working on the third book called Deliver, about how some companies do more for less. As for Nasscom, the appetite for ideas in India is greater than anywhere else because you’re still growing. I like the ambition. The important thing is that they don’t slow down.
