by Dan Heath
A good strategy should guide behavior, and a story can work better in this role than the standard boilerplate missionspeak. At Costco, as described in the book Around the Corporate Campfire, by Evelyn Clark, people talk about “salmon stories.” Jim Sinegal, the co-founder of Costco, said, “In 1996 we were selling between $150,000 and $200,000 of salmon fillets company-wide every week at $5.99 a pound. Then our buyers were able to get an improved product with belly fat, back fins, and collarbones removed at a better price. As a result, we reduced our retail price to $5.29. So they improved the product and lowered the price.”
But the buyers weren’t finished. They subsequently negotiated for salmon at an even better price that had the pin bones and skin removed. They lowered the price on this higher-quality salmon to $4.99 a pound. Later, because the lower prices were driving large volumes of sales, Costco began to place big orders directly with Canadian and Chilean salmon farms, which drove the retail price down to $4.79. The point? Costco stands for the relentless pursuit of ever-increasing quality at ever-decreasing prices. “Salmon stories,” like the elements of CHIFF, provide a brilliant way to communicate the company’s competitive advantage.
Sinegal says, “We’ve used that story so much as a teaching tool that I’ve had other buyers in the company, such as a clothing buyer in Canada, come up to me and say, ‘I’ve got a salmon story to tell you.’”
Two paragraphs back, you came across the sentence “Costco stands for the relentless pursuit of ever-increasing quality at ever-decreasing prices.” Note that the sentence works as a summary of the salmon story—it’s punctuation on the end of the sentence. But here’s the counterintuitive part: It doesn’t stand alone very well without the story. Saying an abstract sentence like that one, without the related story, is the same as being the Tapper in the Tapper and Listener game. “Ever-increasing quality at ever-decreasing prices” is something that is powerful and profound to an executive who has internalized years of salmon stories, but it’s sort of dry and vague to someone who doesn’t have access to those same experiences. (How do we decrease prices? What if you can’t decrease the prices and maintain the same level of profitability?)
Stories that speak to an organization’s strategy have two parts. There’s the story itself, and there’s the moral of the story. It’s nice to have both. If you have to choose between the two, though, choose the story. Because the moral is implicit in the story, but the story is not implicit in the moral. And the story—with its concrete language, specific protagonists, and real-world setting—is more likely to guide behavior.
Both stories and concrete language help leaders dodge the Curse of Knowledge, and everyone in the organization benefits from a shared understanding of the strategy.
Barrier 2: Decision paralysis
Most people in an organization aren’t in charge of formulating strategy; they just have to understand the strategy and use it to make decisions. But many strategies aren’t concrete enough to resolve a well-established psychological bias called decision paralysis.
Psychologists have uncovered situations where the mere existence of choice, even choice among several good options, seems to paralyze us in making decisions. (We discuss one example in the “Simple” chapter). In The Paradox of Choice, Barry Schwartz discusses many other examples of decision paralysis. Imagine two tables in a grocery store where you can taste different kinds of jam. One table has twenty-four kinds of jam, and the other has six. Both tasting tables were popular with customers. But when the sales of jam were tallied, there was a shock: The table with only six jars generated ten times as many sales as the other table! (People simply couldn’t decide which jar, among twenty-four, to buy.) Employees of companies with 401(k) plans also experience decision paralysis. For every additional ten mutual funds offered as investment choices by the plan, the employees reduce their retirement saving by 1 percent. Decision paralysis even affects the domain of love. When singles attended a speed-dating session where they met six other people, they formed more relationships than they did when they met twelve.
If decision paralysis affects retailing and finance and dating, you can feel pretty confident that it’s affecting your employees, too. Think about the sources of decision paralysis in your company. Every organization must make choices among attractive options: Customer service versus cost minimization. Revenue growth versus maximizing profitability. Quality versus speed to market. People development versus the needs of the quarter. Mix together lots of these tensions—an atmosphere full of potential opportunities and risks and uncertainties and incomplete information—and you’ve got a recipe for paralysis.
Furthermore, many classic strategy statements, such as the quest to be the “low-cost provider,” simply don’t speak to many of these trade-offs—for instance the trade-off between quality and speed to market. Now, leaders could solve decision paralysis by encoding everything into a rule: Try all available medications before proceeding to surgery! Many companies do, in fact, adopt this approach—witness the three-inch-thick binders given to new employees to explain “company policy.” But you can never generate enough rules to encompass all the decisions that must be made by your employees. The world is complex, and it evolves. Yet rules forbid anyone to adapt to the world except the leaders who write the rules.
How can strategy liberate employees from decision paralysis? When people are able to talk about strategy, they’re more likely to make good decisions than when strategy exists only as a set of rules. Frontline employees want to do the right thing. Most of them find it quite easy to decide between the right thing and the wrong thing. The problem is deciding between the right thing and the right thing.
The hardest decisions, after all, are the ones where we must decide between two good options. Consider the Costco salmon story. If you’re selling scads of salmon at $5.99 per pound, and subsequently you secure a supply of higher-quality salmon at a lower price, what do you do? You know that there’s enough demand for the salmon to exhaust your supply at the $5.99 price point. So do you maintain the price (or even raise it) to deliver a better bottom line for shareholders? Or do you cut the price to maintain your focus on value for customers? This is a choice between two good options. To make such a choice, you need an index of priorities, and the salmon story provides it. The salmon story is a statement of competitive advantage that drives home the message that Costco’s priority is the customer over the shareholder. (Or, to be more precise, customer value over short-term shareholder profits.)
Organizations, in formulating their strategies, must grapple not just with competitive advantage but with their internal capabilities. What capabilities do we need in order to grow? What skills will our employees need to successfully please customers, and how will we get better at serving our customers over time? An example of strategic language that speaks to internal capabilities comes from Thomas Alva Edison, the inventor of the phonograph and the lightbulb. Edison was not a lone inventor; he created the first industrial R&D lab in Menlo Park, New Jersey. The researchers in his labs were called “muckers.” The term comes from two slang phrases of the time—“to muck in” was to work together as mates, and “to muck around” was to fool around. Why was this a good way for Edison’s researchers to talk strategy?
In any entrepreneurial organization, there’s a natural tension between efficiency and experimentation. Innovation requires experimentation and freedom, and it necessarily involves dead ends and wasted time and errors—all of which, in turn, will reduce efficiency. Edison’s environment, then, is ripe for decision paralysis: How do we decide between efficiency and experimentation? Efficiency promises reduced costs, better margins, and more orders. Experimentation promises new products and other opportunities. How do you choose in the myriad daily situations where the conflict will arise? (E.g., “Is it okay to spend the next hour of my time fooling around in the lab?”)
The term “muckers” is a strategy statement masquerading as a nickname. It makes it clear that, given the tough choi
ce between efficiency and experimentation, you choose experimentation. Why? Because you’re a mucker. Muckers don’t obsess over Gantt charts. Muckers muck. And muckers muck because that is precisely the organizational capability that will make Menlo Park successful. Talking strategy in a thoughtful way can relieve the burden of decision paralysis.
Barrier 3: Lack of a common language
In the classic 1950s models of communication, a “sender” communicates with a “receiver.” The metaphor suggests that the message passed is a kind of package—wrapped up on one side and unwrapped on the other. There is certainly a lot of communication that operates in this way—professors lecturing to their students, ministers preaching to their congregations, etc. Should strategic communication work this way?
Absolutely not. Good strategic communication is like Esperanto. It facilitates communication among people who have different native languages and carves out turf that people can share. Employees rely on leaders to define the organization’s game plan. Leaders rely on employees to tell them how the game is going. For this dialogue to work, both sides must be able to understand each other. This is easier said than done.
Strategy is often articulated in a way that makes it hard for employees to talk back to leaders. For instance, suppose Cranium’s stated strategy had been “To be the No. 1 provider of engaging table-top entertainment.” Now, imagine that you are the Chinese manufacturer, and that you are displeased with the design of the new game piece. On what grounds do you state your objection? The strategy is so high-level, so abstract, that it would make you feel foolish to talk back. What are you going to say? “Using this glued-together piece will threaten our No. 1 provider position”? Doubtful.
The scrappy Savings & Loans Credit Union, based in Adelaide, Australia, has developed a common strategic language. Internally, the company defines its strategy this way: “We don’t want to be first, but we sure as hell don’t want to be third.” The meaning: They want the company to be a fast-follower. They’ll stand back and let the first mover take the risk and grab the glory of innovation, then they’ll come in right behind and copy it, while making the copy crisper than the original. For instance, a competitor offered a credit card that paid part of its commission to an environmental group. The card was a flop, but meanwhile Savings & Loans had ginned up its own card affiliated with the local children’s hospital, which was an instant hit—proceeds from the card funded a $2.5 million renovation of the Emergency Department.
The strategy is clear, and it’s easy to see how it informs behavior across the firm. Marketers should be constantly scanning the environment for good ideas. HR needs to find new employees who are good, quick executors, not creative pioneers. The executives need to use incentives to reward people who are improvers, not inventors. The strategy motto is a one-liner that brings clarity to an environment muddied with choices.
Just as important, it provides a way for front-liners to quibble with executives. Let’s say the president is pushing for a new initiative in mobile banking; he’s convinced that’s where the market is heading, and Savings & Loans needs to stay competitive. But wait a second, says a teller: We don’t want to be first. Why not wait for some of our competitors to experiment with mobile banking, and we can monitor closely what’s working and what’s not.
If everyone in your organization has the same understanding of its strategy, people can disagree constructively. As an analogy, if you’re playing darts and your friend consistently aims too high, you can give useful feedback. But it’s the obvious location of the bull’s-eye that makes your comment possible. What if you and your friend don’t agree on where it is? In that case, your communication will be unproductive and irritating for both of you—and if you were playing “business” rather than darts, the person with more power would win the discussion. A common strategic language allows everyone to contribute.
Making strategies stick: Three principles
The three barriers to talking strategy—the Curse of Knowledge, decision paralysis, and the lack of a common strategic vocabulary—emerge for different reasons, but they can be overcome in similar ways. Cranium’s CHIFF overcomes all three. It communicates how top managers see the brand in a way that overcomes the Curse of Knowledge. It guides people in selecting among competing choices, which overcomes decision paralysis. And it establishes vocabulary that allows everyone in the organization to communicate on the same turf; it even helps a Chinese supplier to argue credibly with the company’s founder.
The trick to talking strategy is making strategic ideas sticky. Here are a few tips for making your strategy stick with people:
Be concrete. The beauty of concrete language—language that is specific and sensory—is that everyone understands your message in a similar way. Trader Joe’s “unemployed college professor” provides a common understanding; “upscale but budget-conscious customer” does not.
Say something unexpected. If a strategy is common sense, don’t waste your time communicating it. (If it’s common sense, why bother?) It’s critical, though, for leaders to identify the uncommon sense in their strategies. What’s new about the strategy? What’s different? Edison’s muckers concept was uncommon sense—in an era when hard work involved farming from dawn until dusk, Edison was telling people to goof around at work.
Tell stories. A good story is better than an abstract strategy statement. Remember, you can reconstruct the moral from the story, but you can’t reconstruct the story from the moral. Think of the power packed into the FedEx Purple Promise award stories, or Costco’s salmon stories. If your company doesn’t have stories that convey your strategy, that should be a warning flag about your strategy—it may not be sufficiently clear to influence how people act. (Otherwise, you’d have some stories to tell.)
Avoiding inert strategies
The conventional wisdom is that leaders should spend a lot of their time presenting and discussing strategy. The most common refrain in strategic communication is repetition, repetition, repetition. Keep repeating the strategy, again and again, until it finally sinks in. Here’s the problem: Repetition doesn’t prevent the Curse of Knowledge or encourage two-way communication. Indeed, sticky ways of talking strategy, such as salmon stories, don’t need much repetition; innumerable psychology studies tell us that it’s much easier to remember concrete language and stories.
There’s a well-established canon of knowledge about what makes a good strategy, and in this article we haven’t contributed anything to it. Rather, we are proposing that leaders treat strategy as a two-step process: Step 1 is determining the right strategy. Step 2 is communicating it in a way that allows it to become part of the organizational vocabulary. Both are necessary.
Unfortunately, many organizations stop at Step 1. Or they implement Step 1 and follow up with 150 executive speeches broadcasting a vision that is impossible for employees to remember and use. If strategies are to be living and active—if they are to become embodied in the actions of employees and outside partners—they must be woven into day-to-day conversations and decisions.
A strategy that is built into the way an organization talks cannot be inert. If your frontline employees can talk about your strategy, can tell stories about it, can talk back to their managers and feel credible doing so, then the strategy is doing precisely what it was intended to do: guide behavior.
II. TEACHING THAT STICKS
As a teacher, you’re on the front lines of stickiness. Every single day, you go to work and try to make ideas stick. Let’s face it, your mission is not easy. Few students burst into the classroom, giddy with anticipation for the latest lesson on punctuation, polynomials, or Pilgrims. How can you reach them?
In this section, we’ll give you more detail about how to apply the six traits of stickiness to your teaching. (A quick note: This article assumes that you’ve read, or at least skimmed, the rest of the book. We won’t reintroduce the basic concepts. By the way, if you want to forward free sticky resources to a colleague who hasn’t read
the book, simply visit www.madetostick.com/teachers.)
There are very practical ways of making your teaching stickier. For instance, every Earth Science class talks about the earth’s magnetic field. But one teacher decided to add a bit of mystery. She asked the students, “Did you know that if you’d been holding a compass 25,000 years ago, and you were walking north according to the compass, you’d be headed straight for the South Pole?” That’s an example of making an idea more unexpected using a knowledge gap. (See The “Gap Theory” of Curiosity for more on knowledge gaps.)
We’ll take the six traits of stickiness, one by one, and show how a little focused effort can make almost any idea stickier. And a sticky idea is one that’s more likely to change how your students think and act.
Simple
Andrew Carl Singer taught a class on digital signal processing at the University of Illinois at Urbana-Champaign. It’s a complex subject, and it’s easy to get lost in the mathematics. So he worked hard to find the core of his class. He began by asking himself a simple question:
When a student from the University of Illinois interviews at a company and says, “I took digital signal processing from Professor Singer,” what are the three things he needs to know in order to get the job and make the University of Illinois proud to have its graduate working in this field?
This is one of the hardest responsibilities of being a teacher. You’ve got more things to teach your students than they could ever remember. So which concepts are most important? And how can you use your class time to make sure those points stick? Professor Singer said that by focusing on the core ideas of the course, “I whitted away the extraneous details—ones that served to separate the A+++ students from the A++ students but weren’t so relevant for the rest of the class.” He identified several core concepts that he wanted every student to learn during the semester. Then he drew a picture that served as a reminder of these core messages. It depicted a process where sounds, such as musical recordings, are sampled and become a digital file. Then the digital file is manipulated and played out through a digital-to-analog converter. He said, “By showing this picture to the class at the beginning of the term and referring to it often, I found that I could keep the class on track with the core messages I wanted everyone to learn. And I also used the core message myself—in deciding which material to keep in the course and which to leave out.”