Adrian J. Slywotzky is a consultant and author of several books on economic theory and management. He graduated from Harvard College and holds a JD from Harvard Law School and an MBA from Harvard Business School. He has worked as a consultant since 1979 and is currently a partner at Oliver Wyman. His published books include Value Migration: How to Think Several Moves Ahead of the Competition (1995), The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow’s Profits with David J. Morrison and Bob Andelman (1998), Profit Patterns: 30 Ways to Anticipate and Profit from Strategic Forces Reshaping Your Business with Morrison and Ted Moser (1999), How Digital Is Your Business? with Morrison (2000), Profit Patterns: A Field Guide with Morrison (2002), The Art of Profitability (2004), How to Grow When Markets Don’t with Richard Wise (2005), The Upside: From Risk Taking to Risk Shaping—How to Turn Your Greatest Threat into Your Biggest Growth Opportunity with Karl Weber (2007), and most recently, Demand: Creating What People Love Before They Know They Want It, also with Karl Weber (2011):
Note: You may wish to read Psrt One of the extended interview. In it, Slywotzky responds to general questions and then several about his earlier works.
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Morris: Although I highly regard the three books previously discussed as well as your other works, I want to say now that I think Demand is the most interesting and – yes – the most entertaining book you have written…thus far. Was it as enjoyable to write as people will find it to be when they read it?
Slywotzky: The fun you had in reading Demand absolutely mirrors the fun we had in researching and writing it. In particular, getting to meet so many of the “demand creators,” ranging from brilliant CEOs to front-line employees with a passion for solving customer problems, was a real treat. They’re among the most creative, caring, and interesting people I’ve ever met, and I came away with a deep sense of admiration for them and what they contribute to our world.
Morris: To what extent (if any) does the book in final form differ from the one you originally envisioned?
Slywotzky: There was a complete draft of Demand almost two years ago, but it was much more of a traditional business book than the version you’ve read; it contained graphs, tables, and even a bit of technical jargon. It could have been published in that form, but realizing that the theme was of broad interest and importance in today’s demand-challenged economy, we decided to revise it thoroughly, with a much greater emphasis on stories and personalities. I hope the positive reactions from you and other early readers mean that Demand will reach a wider audience—and maybe even help to change the way organizations around the world do business.
Morris: Were there any head-snapping revelations while writing it?
Slywotzky: Yes, in almost every story that we researched! Here’s just one example. We were stunned to learn that Netflix actually struggled to enroll enough customers to achieve liftoff, until they realized that having distribution centers scattered all over the country was key. They found that when DVDs could be delivered by the Postal Service overnight the service became far more magnetic and desirable. People couldn’t stop talking about it. The discovery came as a surprise even to Netflix executives, and to this day very few people are aware of the crucial role that the US Post Office played in making Netflix a huge success.
Morris: As I read the first few chapters, I was reminded of a common expression, “I’ll know it when I see it.” It seems to me that those who create demand envision the “it” before anyone else does, perhaps after recognizing an unmet need and then determining how best to respond to it. Is that an accurate assessment?
Slywotzky: Very much so. That’s one of the real gifts demand creators have—the ability to recognize the gap between what we settle for and what we really want or need, and then to imagine the perfect product or service that will fill it. By drawing the hassle map of the customer, it becomes much easier to see the sources of tomorrow’s demand. It’s a bit like x-ray vision for entrepreneurs.
Morris: Your use the term “product” to include both an item and a provision of service, both of which are indeed produced for a consumer. Whatever form the product may take, here’s my question: How best to create demand for commodities that are essentially interchangeable and sold for essentially the same price?
Slywotzky: There are many answers, depending on specific circumstances. Sometimes the key to escaping the commoditization trap is by providing ancillary products or services that enhance the value of your offering. We call this “big box thinking,” with the big box of supporting products or services providing differentiation to the “little box” represented by the basic core product. In other cases, the key is to offer the commoditized product in a place, a time, or a specific form that competitors can’t match and that customers find uniquely valuable.
Morris: Please explain what you mean by “the mystery of demand.” Will your book eliminate that mystery?
Slywotzky: You touched on the mystery with your question about commoditized products. We live in a world where seemingly identical goods often produce vastly different streams of demand—where the iPod, for example, dramatically outsells every other MP3 player despite the fact that their functions are almost the same. There are numerous cases of two seemingly similar products where one produces 5x more demand than the other. We wondered why demand appears so unpredictable in cases like this—and why otherwise well-run companies so often fail to elicit demand for new products they create. Demand suggests the answers we discovered through several years of research.
Morris: What business lessons can be learned from the process by which Zipcar eventually achieved sustainable success?
Slywotzky: It’s a great story with a host of possible lessons for various kinds of readers. Maybe the most dramatic is that seemingly tiny functional differences can have a huge impact on demand. Zipcar’s online car rental system was beautifully designed and highly efficient, but customers shied away from becoming members until the average walking distance to the nearest car was whittled from 10 minutes to 5 minutes. Imagine that—Zipcar can save members hundreds or even thousands of dollars per year as compared with the expense of owning their own vehicle, but that extra five minutes of walking time made all the difference!
Morris: How does Wegmans differentiate itself from its competition?
Slywotzky: We were shocked by the kinds of comments Wegmans customers offered about the grocery chain—“love” is the only word you can use to describe their feelings (in fact, 90 percent of Wegmans’ customers say they “love” the store). And there are lots of specifics one can point to in defining the difference, like the huge selection of specialized foods, the ultra-fast checkout lines, and so on. But the key difference in the way Wegmans treats its people. They reward employees well, train them extravagantly, recognize and reward their creativity, and empower them to solve customer problems. The result is a store staffed with hundreds of demand creators. Quite amazing.
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To read the complete interview, please click here.