The story of how Edward Stobart grew his father’s haulage business is a perfect demonstration of how to develop a brand.
Two events in the past month – one tragic, the other rather more welcome – prompted me to think again about the nature of innovation. The first event was the death, at the age of 56, of Edward Stobart. He was the man who took over his father’s haulage business and transformed it into a UK market leader in logistics.
The second was the arrival on my desk of Beyond the Familiar, the latest book by Patrick Barwise and Sean Meehan. This duo, you may recall, were the brains behind the now classic book Simply Better.
Simply Better provided a useful counter-weight to those who argued that creating differentiation is the cure for all marketing ills. Barwise and Meehan proposed that brands are better off finding out what consumers really want from a category, then simply delivering it better than the competition.
Now the cynic in me initially suspected their latest offering was the business school equivalent of that difficult second album. I can almost imagine the conversation over lunch in the LBS Senior Common Room, or, if the publisher was paying, The Ivy.
“There’s a bandwagon coming to town, and it’s called Innovation. Forget all this gradualism stuff you talked about in your last book. People want to know how to drive big change.”
However, far from embracing radical change, Barwise and Meehan have produced a book that develops their original thinking. Beyond the Familiar is a prescription for cautious, step-by-step change, not blue sky thinking.
All of which I initially found a little disappointing. If we planners have a weakness, it’s our love of great leaps forward. They’re what get you noticed, not the quiet and painstaking use of insight to perfect a brand’s delivery.
However, when I started reading Stobart’s obituaries, I changed my mind. The career of this man and the history of the brand he built is an almost perfect example of the precepts laid out by Barwise and Meehan.
The authors cite five principles. But to preserve their sales, I’ll only cover three here. And to respect their copyright, I’ll paraphrase extensively. The first point I took out (and it’s a big one) is that the most important thing most businesses can do is simply to stop annoying their customers.
Barwise and Meehan recommend that leaders shape their delivery strategies around the brutal arithmetic of the Net Promoter Score.
A lot of too-clever-by-half strategists (myself included) have criticised this measure. It’s a blunt instrument that lacks diagnostic insight. But it disciplines management like nothing else.
The NPS hadn’t been invented when Stobart set about transforming his business in the Eighties. But even without it, he knew the things that customers hated about the business he was in – slovenly drivers and old, dirty lorries.
Stobart addressed both issues from day one with a compulsory dress code and a preoccupation with vehicular cleanliness. Rather than creating a new category, Stobart transformed an existing one.
The second point I gleaned from Beyond the Familiar was the importance of turning research data into actionable insight.
I doubt whether Eddie Stobart Ltd, as the haulage company was then known, had a large research and insight department in the Eighties. But despite this, Edward Stobart knew which way the wind was blowing. And more importantly, he acted on it.
He saw the exponential growth of out-of-town supermarkets and the adoption of just-in-time stock management. And he responded by creating a logistics solution for brands like Tesco that effectively turned his lorry fleet into a vast warehouse on wheels.
The last principle that Barwise and Meehan hammer home is that of ’adjacent’ rather than radical innovation, and the related benefits of being a fast follower rather than a pioneer.
A compelling example they give is that of Philips, the company which gave the world the audio cassette, the home VCR and the CD, but which failed to monetise any of these radical innovations.
In sharp contrast to this disruptive thinking, Philips’ current strategy is to leverage existing technologies to meet newly-identified customer needs better than the competition.
Look at the way Philips has found new and innovative ways to market the light bulb. Thanks to Philips, you can now relieve your seasonal depression with bright lights in the winter, and wake up to a bedside lamp that mimics the gradual onset of dawn.
Many so-called disruptions are actually shrewdly-observed moves by fast followers. Apple is frequently held up as a shining example of disruptive thinking in practice. Yet Steve Jobs no more invented the MP3 player than Edward Stobart invented the lorry.
The development of Eddie Stobart is a perfect demonstration of the wisdom of a brand developing into adjacent territories rather than tilting at disruptive windmills.
As Theodore Levitt reminds us, the US railroad companies notoriously failed to define the business they were in and thus lost out to the airlines. Stobart never made this mistake. He understood that he was in the business of moving stuff around, not merely running a fleet of lorries. A natural result of this was the company’s gradual transformation into a multimodal logistics company, running railways, ports and airports.
Long may Barwise and Meehan keep on reminding us of the power of fundamental insights such as this. And long may Eddie Stobart keep on trucking.
Richard Madden is chief strategy officer at Kitcatt Nohr Digitas