Why Unilever Buying Dollar Shave Club is Relevant for Your Firm

tunnelvisionOr, Why You Might Lose Your Business If You Don’t Change the View:

Michael Dubin just sold his startup for a cool billion $ to European consumer products behemoth, Unilever. His four-year young firm is reportedly not profitable, although it has signed up 3.2 million paying subscribers.

In case you are not familiar with Mr. Dubin, his business, Dollar Shave Club is effectively a mail-order firm for shaving and other personal grooming products. Old tech, but Dubin threw a twist at it. (Remember, Zappos changed the tired shoe retailing industry with a low-tech twist on the business model.)

The idea, which turned out to be brilliant, went straight at the heart of a really annoying problem for men who shave dailythe cost of razor blades at your local retailer fits somewhere between the average monthly car payment and two tickets to the hit Broadway play, Hamilton. The darned things are outrageously expensive and the traditional razor blade manufacturers have been minting profits at the expense of men’s beards and household budgets for decades. Until Dollar Shave Club rewrote the rules.

For a low monthly fee, the firm ships you your blades (you choose from 3 options as of this writing), and they keep them coming. The offerings have expanded to include shaving cream, hair gels, body washes and yes, even “One Wipe Charlies” (flushable wipes).

Michael and Dollar Shave Club found a way to take burden, cost and annoyance out of an everyday problem for a big chunk of the population. Taking burden away from people is a great starting point for a strategy.

The traditional players: Unilever and P&G had no reason to ever think of this business idea. After all, they had a stranglehold on an allegedly highly profitable category.

Unilever solved their innovation problem by buying Dollar Shave Club. P&G, the other consumer products giant has been playing catch-up with its response via their Gillette brand. P&G’s market share has steadily declined, mostly at the expense of Dollar Shave Club.

When asked about this strategic miss, someone described by the WSJ as “familiar with the company’s (P&G) thinking,” offered, “It was probably on the radar but we weren’t necessarily having the right conversation around what might disrupt us.”

At Least 5 Big Lessons from Unilever Buying Dollar Shave Club:

  • Not having the right conversations is potentially fatal to your business in this fast changing world.
  • Assuming your cash machine of a business model will continue to dispense money indefinitely is naïve.
  • Someone is looking at your customers and wondering how to remove burden and remove you from the equation.
  • It’s critical to fire up the right conversations and move beyond the myopic view to how you’ve always done things. The first step involves changing your view.
  • If all you do is look out the window from the conference room to your parking lot, the view never changes.

The Bottom-Line for Now:

It’s time to challenge your team to change the view.

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Related Posts:

Art of Managing: Change Your Field of View

The Painful Process of Pivoting to New Markets

Practical Lessons in Leadership

book cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

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Art Petty is a coachspeaker and workshop presenter focusing on helping professionals and organizations learn to survive and thrive in an era of change. When he is not speaking, Art serves senior executives, business owners and high potential professionals as a coach and strategy advisor. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.

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New Video: 3 Ideas to Help Jump-Start Your Strategy Process

Kicking off a strategy initiative is one of the more vexing challenges in all of business. Aside from widespread confusion or disagreement over what strategy really is, there are the human issues around ego, politics and power that naturally emerge when the idea of a course correction or change in the business is in the air.

The video offers some thoughts on the swirl that often surrounds a new strategy initiative and includes 3 “simple but not simplistic” ideas for getting started and building a collaborative and cohesive process.

(Note from Art: this is one of a new family of videos I am releasing to my YouTube channel. The content is mostly informational with a 7-second pitch at the end. I do have to make a living!)

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Related Articles from Art on Strategy:

From my writing at About.com

The Manager’s Guide to Understanding Strategy: Getting Started

How to Prepare for Your First Strategy Meeting

Selected Articles from the Strategy Category at Management Excellence:

The Painful Process of Pivoting to New Markets

Art of Managing: Change Your Field of View

Art of Managing: Beware Lazy Approaches to the Hard Work of Strategy

Art Petty serves senior executives and management teams as a performance coach and strategy facilitator. Art is a popular speaker and workshop presenter focusing on helping professionals and organizations learn to survive and thrive in an era of change. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.

Get the latest e-book (free) from Art: “A Bold Cup of Leadership Caffeine: Ideas to Stimulate High Performance.” 

See posts in the Leadership Caffeine™ series.

Read More of Art’s Motivational Writing on Leadership and Management at About.com!

Practical Lessons in Leadershipbook cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

Profile: The Perfect Trio for Business Success

SignaturePopcornNote from Art: When I encounter remarkable small businesses and owners/entrepreneurs, I feel compelled to help them tell their stories. Enjoy the profile of these remarkable young professionals!


What do world-class running coaching, delicious caramel and cheddar popcorn and great marketing all have in common?

In the case of Eric Wallor and Amber and Edgar Murans, three young University of Illinois graduates and successful entrepreneurs, the combination spells hard work, financial reward, and the joy of carving out career paths they love.

For anyone lamenting the work ethic and commitment of the millennial generation, they have yet to meet Eric, Amber and Edgar. These three pursue their work with passion, vigor and with smiles on their faces on even the most challenging days.

A bit of background on this dynamic trio:

Eric is an elite distance runner and successful running coach via his Full Potential Running practice. When he is not training aspiring elite runners, he works as CEO of Signature Popcorn, a joint venture with his sister Amber and her husband, Edgar.

PerfectTrioAmber and Edgar are the founders of Left Hand Marketing—a successful digital marketing/social media firm supporting software, hospitality firms as well as independent business coaches and speakers. They joined Eric in the Signature Popcorn pursuit, and are busy conquering the world of this delightful fun business, one satisfied customer and corporate group at a time.

When I asked them about their approach to their businesses, they shared some life lessons that reflect wisdom beyond their years.

Amber: “We left college and found ourselves all working outside of our degree areas and just not satisfied with our career paths. Add in the financial crash around 2008 and prospects did not seem much brighter. With some nudging from our close friends, we launched Left Hand Marketing, and found an immediate demand for our help with social media marketing.”

Edgar: “We quickly recognized that our clients needed help in more than just social media marketing and we worked hard to learn new skills and translate those skills into social business and social selling initiatives for our customers. From teaching them how to leverage video to building and delivering a training program on leveraging LinkedIn for sales professionals, we have been expanding our services to help our clients grow.”

Eric: “Running is my passion and the ability to coach people of all levels and abilities and watch them set and beat their goals is incredibly rewarding.  I initially focused on face-to-face coaching, and from there expanded to coach runners virtually across the country, and now I am working with a broader range of runners—from elite runners striving for Olympic greatness, to those trying to qualifying for the Boston Marathon and to business professionals striving for fitness and psychic rewards. It is incredibly exciting work for me and I love helping people.”

UpdatedLogoSPBut, What About Popcorn?

When I asked about the tie-in between the popcorn business and their respective coaching and marketing service pursuits, they collectively laughed.

Eric: “This was a door that opened through contacts in our Palatine, IL Chamber of Commerce and we stepped through it. It was purely opportunistic and it has grown into a business that we love. It makes people happy and frankly, the work from production to marketing and fulfillment is just fun. I truly believe God’s hand was at work with this opportunity.”

Amber: “I fell in love with the idea of offering products that make people happy and I jumped in to the research. From flavoring to packaging, labeling, and all of the marketing activities, I feel this is an extension of all of the work we have been helping our clients with in the past few years. And plus, who doesn’t like to wear these cool hairnets? (said with a 10,000 watt smile).

Edgar: “Running this business helps us with empathy and understanding for our marketing clients. We know that we must delight our customers, keep quality at the highest level and of course, market and sell to succeed. There is no better proving ground for our own marketing services than this fun business.”

Vision:

Their vision is to build a thriving popcorn business that becomes a big part of their community and beyond. They are big believers in giving back and looking to pursue charitable endeavors that will help people and make the work they do all the more fulfilling. For them, a key area of focus over the next year will be in developing the fundraising and corporate sales part of the business. They understand that they have a lot of work cut out for them, but excited to take on the journey.

Art’s Confession: “I Have a Popcorn Problem”

Sidenote: I have consumed a lot of popcorn in my time and consider myself a bit of a caramel and cheese popcorn snob. This is the best I’ve ever had. (Sorry Garrett you’re number two in Chicago now.) The carefully cultivated caramel flavoring has just that right blend of rich, dark sweetness (but not too sweet and definitely not greasy), and their trans-fat free cheese version delights the popcorn lover’s palate. Combine the two into what they call the Perfect Duo, and you have….well, you have a perfect duo guaranteed to throw my clean eating program completely off kilter for one delightful popcorn binge. My only lament is that their cheese popcorn has a habit of turning my keyboard an orangeish-yellow, although I suspect that is my fault and not theirs!

The Bottom Line for Now:

As a strategist, I admit to initially struggling just a bit at the tie-in between the different businesses. However, after talking with the group, I get it. Their formula for success blends a bit of opportunism with a whole lot of experimentation and wraps it in a passion for serving their customers. That is the real perfect trio for success in business!

Art Petty serves senior executives and management teams as a performance coach and strategy facilitator. Art is a popular speaker and workshop presenter focusing on helping professionals and organizations learn to survive and thrive in an era of change. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.

Get the latest e-book (free) from Art: “A Bold Cup of Leadership Caffeine: Ideas to Stimulate High Performance.” 

See posts in the Leadership Caffeine™ series.

Read More of Art’s Motivational Writing on Leadership and Management at About.com!

Practical Lessons in Leadershipbook cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

The Painful Process of Pivoting to New Markets

shutterstock_150777920Many senior leaders I encounter are grappling with the modern business problem of our time: what to do for an encore. And no, the encore isn’t a personal one, but rather it is all about the business. Long successful businesses are waking up to the reality that not only did someone steal their cheese, but, the thief ate the cheese. That cheese is not coming back.

Reinventing an old business  in the process of being rendered obsolete due to changing tastes, new technologies, disruption via business model or some or all of the above is the most difficult act in all of business. It happens, but it is rare. When it does, we study it in business schools, attempting to grok the deep insights of the firm’s managers so that we can apply these enlightened and obviously brilliant rules for reinvention to our own situations. Unfortunately, the rules always seem to be for a game we are not playing.

For every successful re-inventor there are many, many others that flail and fail in the process. The roots of these failures are found in human nature and exacerbated by our stubborn application of our traditional, short-sighted management approaches. Oh, and leaders with true courage are often nowhere to be found.

Why the Deck is Horribly Stacked Against Reinvention:

The firm’s collective knowledge and experience—the secret sauce is all about one recipe. The knowledge, skills and abilities are focused on the legacy markets, customers and offerings. The dominant logic of the firm is rooted in making decisions around a set of well understood variables in the industry and with customers. What made you great yesterday, may be one of your biggest disadvantages tomorrow.

We are mostly in denial about the creeping irrelevance of our legacy businesses. Even in the face of obviously declining markets, revenue and profit targets are ratcheted upward by senior leaders who naively believe that they can fight gravity. “Our sales team is stronger than our competitor’s…we will take market share,”offered one executive facing a factually undeniable collapse in demand for their offerings. Even if it works once or twice, it is a dangerous mindset that delays the urgent need to replace old revenue streams.

We talk a good game about innovation, but lack the discipline to pull it off. With our traditional strategy rendered obsolete, we have no filters to help us assess the quality of ideas and to select experiments to invest our shrinking company treasure. All the ideas seem good in isolation.

Desperation makes us stupid. As the numbers from the legacy business enter free fall, we start to flail, looking for quick fixes and we swing away, hoping to connect on a last minute home run hit. The distance from flail to fail is very short.

Even when we find a viable option, we tend to starve it for resources, focus and time. Our tendency is to evaluate new ideas against traditional metrics, and when the results fall short, we reduce our investment support and increase our agitation over the slow-to-emerge results.

Why Leadership Courage is the Missing Ingredient:

Some would argue that a declining business should be allowed to die—sooner if possible to minimize squandering any remaining shareholder treasure. I struggle with blind acceptance of the need for creative destruction. Having lived through and led during one of these that worked (and one that did not), I know that there is no easy answer. For any chance of success however, the one ingredient that must be present is leadership courage. Every single step of the process of reinvention demands a level of courage that many senior managers struggle to manifest.

Why Leadership Courage is Core to the Reinvention Process:

Navigating successfully into new arenas is frightening to your stakeholders. Shareholders, board members and external influencers will caution you against taking unnecessary risks and urge you to move carefully into these uncharted markets. They will second-guess every move you make, and if you are not careful, their creeping doubt will infect you. Of course, they will hammer you mercilessly for near-term results.

Employees—the ultimate stakeholders, will struggle to understand what this change means for them. Some will fight it, others will resent it quietly and some may even leave. You are left on one side with the need to engage and motivate your employees and on the other side with the need to blow up elements of the culture.

Real-time demands will challenge you every day to put more attention and more resources into the legacy business. The distractions will siphon your energy, gray matter and focus so essential for the new endeavor.

Scanning for new opportunities is often limited to the firm’s myopic view of the world. It is challenging to push beyond the gravitational pull of the legacy world. You are fighting the internal system and the dominant logic. You need help…and often, you will have to ask for help.

Saying “no” to the many good ideas that you will hear—avoiding what Jim Collins describes as the “undisciplined pursuit of more” is essential for survival. It is hard to say “no.”

The Bottom-Line for Now:

If only this issue were simple enough to distill down to one of those ubiquitous “Ten Steps…” type lists so common to blog posts. Life and business are mostly never that easy. And no, my indication of the need for “leadership courage” is not the default answer of a leadership blogger. It is the observation of a veteran of these wars. Without leadership courage present and accounted for in every decision, every day, there is no chance of success.

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Get the latest e-book (free) from Art: “A Bold Cup of Leadership Caffeine: Ideas to Stimulate High Performance.” 

See posts in the Leadership Caffeine™ series.

Read More of Art’s Motivational Writing on Leadership and Management at About.com!

Art Petty serves senior executives and management teams as a performance coach and strategy facilitator. Art is a popular speaker and workshop presenter focusing on helping professionals and organizations learn to survive and thrive in an era of change. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.

book cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.

Management and Quality Lessons in the Airbag Recall

qualityWith clear acknowledgement that I am just one of millions of consumers impacted by the Takata Airbag disaster (recall), I feel compelled to vent. I of course vent not by screaming, but by looking for the management lessons in the mess. There are more than a few marketing and management lessons embedded in the industry’s handling of this potentially life-threatening problem.

When Your Safety System Can Hurt You:

I received a note from BMW yesterday indicating that my automobile includes the problematic airbag inflator on the driver’s side. This comes six months after I asked my dealer whether my car was involved. Their response: the manufacturer has not yet indicated whether your car is affected. I understand that the dealer was simply sharing their view of the facts at that point in time. Nonetheless, their response: “the manufacturer has not yet informed us,” was incomplete and unsatisfying. The implication for me as the consumer was either: “Whew, I dodged that one,” to “Hmmm, I wonder if this is a problem.”

I opted to focus on the potential problem, and at that point, I started sizing up my car before driving it with the care of someone scanning the occupants of a Chicago Elevated Train late at night. This change in relationship with my car is particularly troubling given our long love affair. You see, I only enter into long-term relationships with my automobiles, and until now, this has been a great one. At ten years and 50,000 miles, we are just getting started. Unless of course, the car turns on me, which is now a distinct possibility.

System Responsibility—An Anachronism?

Graphic with the words of Art of Managing and other management termsBefore describing BMW’s response to my particular situation, a bit of background is in order. I grew up in my career working in and leading systems businesses. We wrote software and in some cases developed and manufactured hardware, and we married the pieces together plus many third party technologies to deliver a complete system to our customers. Our systems were material to the minute-to-minute operation of the businesses of our customers.

We also took complete responsibility for the integrity and quality of our systems. That’s code for it did not matter whether there was a problem with something we had created or something we had integrated, it was OUR problem and we owned the fix. This was called in our vernacular: system responsibility.

Part of the process of ensuring system responsibility was working with approved third-party suppliers to establish quality standards and to plan and prepare together for the worst. We did not just hope everything would work out; we evaluated options and issues and made plans for catastrophes known and unknown.

When the worst happened, as it occasionally did, we always opted for the solution that reduced adverse consequences for our customers. In some cases, there was a short-term and long-term fix, but there was never a “We’ll get back to you at some point in time, but please suffer for now.”

These businesses moved heaven and hell to support their customers.

In today’s world, perhaps Apple comes the closest for ensuring system integrity with its very rigid approval process for the App store and for other related third-party products. However, having experienced some quality challenges with offering in the Apple ecosystem, it appears their response stops far short of our historic moving heaven and earth approach.

Contrast the system responsibility approach with BMW’s, which to my ears mostly has the odor of dodge, deflect and prepare for our future legal defense about it.

Here’s what they offered:

  • They sent a letter outlining the problem and indicating that they would fix it. Good.
  • At this time, there are no parts available. Bad.
  • They are not certain when parts will become available. Very bad.
  • Once parts were available, I would be notified via mail that I could call my dealer and schedule the update. Huh? Mail? Very bad. I might expect a text notice complete with timing options at my servicing dealer and the promise of a loaner car.
  • There were no countermeasures in the short-term. They could not recommend disconnecting the potential killing machine known as an airbag and they are not offering a repair, just a replacement at some unknown date. Miserable.
  • In calling the BMW Airbag Recall Hotline, they did their duty and acknowledged the facts and offered no solutions. No short-term countermeasures. No workarounds. And while they did not state it, the gentleman on the line did not disagree with my statement: “It sounds like the safest strategy is to park the car.” Abysmal.
  • The hotline offered: “At this point, there are no known injuries caused by this airbag issue for your model.” Is that really supposed to put me at ease? Poor form.

The implication of all of this is obviously that I drive the car at my own risk—something we all do every single day of course. The difference now is that I have to drive my car with the knowledge that my safety system is capable of hurting me. Yes, I get that cars are dangerous objects, but none of us signed up for this particular risk. In fact, I purchased this car because of its alleged remarkable safety ratings and features.

Just a Very Little Bit of Empathy with the Manufacturer:

Having been on the other side of quality issues at the manufacturer’s level, I can only imagine the nightmare this has created for every car company. And while the root cause of the quality issues is focused on Takata, the firms integrating their parts owe their customers something more than what they are providing. They failed to prepare for the worst. This is a failure of risk management and it seems a complete abrogation of their responsibility to their customers.

The Bottom-line for Now:

There is no sign of systems responsibility in this process. Heck, it feels like backpedaling mixed with a dodge and deflect strategy. The customers who are so important to giving life to the brand are suddenly made to feel ill at ease and even slightly adversarial. Instead of reinforcing their remarkable brand value and integrity, this firm has opted to risk it because they could not control or prepare for problems with a critical parts supplier.

I have enjoyed this car more than any I have ever owned, and at the purchase of one auto every two decades or so, I suspect I am lousy customer for BMW. Nonetheless, as Deming offered in his admonishment to focus on quality: What is the cost of a dissatisfied customer?

Now, I have to go plug in my trickle charger and spend some time detailing my car. It is in for a long sleep.

Get the latest e-book (free) from Art: “A Bold Cup of Leadership Caffeine: Ideas to Stimulate High Performance.” 

See posts in the Leadership Caffeine™ series.

Read More of Art’s Motivational Writing on Leadership and Management at About.com!

Art Petty serves senior executives and management teams as a performance coach and strategy facilitator. Art is a popular keynote speaker focusing on helping professionals and organizations learn to survive and thrive in an era of change. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.

book cover: shows title Leadership Caffeine-Ideas to Energize Your Professional Development by Art Petty. Includes image of a coffee cup.