How many of you have heard of something called ‘The Golden Mean’?
It is a concept that was central to the thinking of Aristotle – the ancient Greek philosopher.
The Golden Mean is the desirable middle between two extremes. One of excess. One of deficiency.
For example, in the Aristotelian view, courage is a virtue. But if courage is taken to excess it becomes recklessness. The warrior who charges at fifty enemy soldiers. But if courage is deficient it would become cowardice. The warrior who flees from the battlefield.
The concept doesn’t just apply to ancient warriors. It also applies to little girls in fairy tales. We’re all familiar with the story of Goldilocks & The Three Bears. “This porridge is too hot”. “This porridge is too cold”. “Ahhh, this porridge is just right”.
Aristotle would tell Goldilocks that the porridge that was “just right” represented The Golden Mean. Then because he is so wise, he would tell her to “get the f*** out of the house because three bears live there”.
Why are we talking about this? Well, it has felt very relevant in recent weeks. Worry too much about the virus and it leads to fear. Don’t worry enough and it leads to complacency.
Fear leads to having 50 toilet rolls in your house. Complacency leads you to being down to your last few sheets. Neither is a good idea. The sweet spot is getting things just right. Be concerned. But don’t panic. Buy the same number of toilet rolls you normally buy.
Getting things just right is important right now. But it has always been important. And it always will be important. Too focused on the short term? Then you miss the longer term opportunities. Too focused on the long term? Then you won’t deliver the numbers in the short term.
Just right is the balance between the short and long term. The balance between the simple stuff and the breakthrough stuff. The balance between brand building and selling.
We can’t give you a magic formula to get things just right. It will be different for different companies. Different for different circumstances.
However, what we can do is encourage you to ask this question of your activities. Are they too hot? Too cold? Or just right?
Here are 3 examples…
Category Strategy. A category strategy that is too hot is too focused on the future. It focuses on lots of far out things to drive category growth. A couple of these things will happen. But many of them won’t. A category strategy that is too cold is too focused on the here and now. It focuses on lots of small activities that can easily be delivered. But most of these things won’t move the needle. You risk the category looking exactly the same in 5 years’ time as it does now.
A category strategy that is just right is one that is ambitious enough AND grounded enough. It sets a clear direction for where the category is heading whilst being anchored in where the category is right now. Take a look at your category strategy. Is it too hot? Too cold? Just right?
Channel Strategy. A channel strategy that is too hot is one that is too focused on the new. All the new places you can sell in. All the new selling models and partnerships you can develop. The places and things that may get bigger but are really small right now. Deliveroo for many FMCG brands is an example. A channel strategy that is too cold is one that is too focused on where you are currently selling. It is about protecting your business in traditional (usually grocery) channels.
A channel strategy that is “just right” is one that gets the right balance between where you currently sell AND where you could be selling. Continuing to drive sales in the high volume channels whilst building presence in the relevant growth channels for your category and brands. Take a look at your channel strategy. Is it too hot? Too cold? Just right?
Portfolio Strategy. A portfolio strategy that is too hot is one that is primarily focused on new products. For instance, if you are in the bakery category you spend all your time thinking about wraps, pittas, thins, flatbreads. A portfolio strategy that is too cold is one where you mainly focused on existing products. So, in the baking example you mainly think about sliced pre-packed bread.
A portfolio strategy that is “just right” is one that has some of the current and some of the new. You adapt your portfolio to where the category is heading whilst continuing to give enough support to the big selling segments and SKUs – the ones that most shoppers still buy. Say you are Nestle. You have Nespresso. You have Nescafe. Take a look at your portfolio strategy. Is it too hot? Too cold? Just right?
The “just right” principle holds across most of the activities you do. The right level and type of promotions. The right balance between driving trial and repeat for new products.
As we said, there is no magic formula for this. You need to use judgement. To do this you need to know where you currently are. Too hot? Too cold? Just right?
What applies to porridge applies to life.
Feel free to forward. Have a good weekend. Speak to you in a fortnight.