Few things in life or business are as important as meaning – semantics. Yet almost every day I see examples of managers and leaders developing ideas and plans without really knowing what they are talking about.
About 14 years ago, in my book Hoover’s Vision (available as an updated PDF here), I wrote that a key part of entrepreneurial and innovative thinking was redefining and reclassifying your world. In those intervening years, I have become more convinced of the importance of this idea and its rarity in modern thinking.
Each new fashion, technology, and industry brings its own jargon with it. We become used to this jargon and start using it without thinking about its meaning or re-evaluating what we are saying.
Recent examples from my experience include:
- People sitting in the same room “talking” to each other through mobile devices are “social.”
- Games from Words with Friends to Monument Valley are classified as “video games” when they use no video.
- Customer transaction quantity and frequency is called “loyalty” when the only real measure of loyalty is the share of that customer’s business that you earn. (Your largest and most frequent customer might spend a “disloyal” ten times as much with your competitor.)
- Even business journalists referred to Apple as the world’s largest company when in fact their amazing achievement was to at times become the most valuable company, a very different thing.
I frequently see and read articles based on flawed thinking resulting from flawed definitions. Rarely do we stop and think, “What are we really saying?”
Few things can have a greater impact on your mind than taking a hard look at your definitions. Take some examples adapted from my book.
Quick, what is the largest stringed instrument in a typical orchestra?
Did you think only of instruments shaped like violins, such as the cello, viola, and bass? Or did you think of the piano, the correct answer?
Our thinking usually starts with a set of definitions and classifications. Often, we are so familiar with these definitions that we don’t even think about them. “Major” sports means baseball, basketball, and football. But our definitions sometimes go astray. What often holds people and companies back from innovative thinking is using worn-out definitions. So we should start by checking our definitions before proceeding.
Here are examples of definitions that have gone astray or become bent out of shape:
- We have been told all our lives that Europe is a continent. But by any rational definition of continent, such as “a large hunk of land surrounded by water,” Europe is not a continent. It is a peninsula on Asia. There has even been a book written about this quirk of our culture’s Eurocentricity.
- If you go to a bookstore and pick up a guide to North American mammals, it will almost never include dogs, cats, or cows, and certainly not humans. Are we not mammals? The reality is these books are not guides to mammals; they are guides to wild mammals.
- In the 1950s, one of the biggest figures on the world stage was Soviet “dictator” Nikita Khrushchev. He was supposed to have the same kind of “job” as Hitler and Stalin. Then all of sudden Khrushchev was sent to live incommunicado in his country cottage outside Moscow. If he could be fired, then what did this word “dictator” really mean?
- Go to the history section of a bookstore, or sit in a history class. When academics and authors say “history,” much of the time they mean military and political history. But real history includes more: the history of General Motors, of Microsoft, of restaurants, of salads, of pets, of sports, of aviation, of churches, and of movies.
- I love machines. Sometimes people ask me what my favorite machine is and I say, “My thirty-six-inch Balinese gong,” and they say that isn’t a machine. But look up “machine” in the dictionary and you’ll see that a giant metal disk that is struck so it vibrates and sends pressure waves through the air to our ears is certainly a machine. As cool a machine as man has ever made, in my humble opinion.
Clear minds break through definitions that aren’t right. For years, most of the work done in economics was restricted to money and business. But anyone who really understands the power of the economic way of thinking realizes that it is the study of the allocation of scarce goods. These “goods” can include religion, love, and many other things. If the only reason we did things was to maximize the amount of money we had in the bank, why would anyone (except a farmer) ever have kids? It took Gary Becker at the University of Chicago to begin to apply economic logic to family and marriages, to racism and discrimination, even to crime and punishment. Eventually he won a Nobel Prize for his work, which changed the way we define “economics.”
My first job out of college was working for Citibank. At the time, Citibank was led by a great thinker named Walter Wriston. While the other banks considered Citibank the competition to watch, Wriston told us that we were not just a bank, we were a financial services company, and that we should watch not just the other banks but companies like Visa, Sears, Merrill Lynch, and Household Finance. Years later an executive of the biggest cruise line told me his competition was not just the other cruise lines; it was any way for people to have a fun weekend, whether in Las Vegas, at Disney World, or on a cruise ship.
Lessons from Retail Definitions
Later in my career, I got to know the people who ran one of the best supermarket chains in the US. They were talking about how disappointed they were in their sales of greeting cards. They asked my advice. I looked at their organization chart to see how they classified their world. It read: “meat, produce, canned goods, dairy, baked goods, nonfoods.” That was all I needed to know. In their world, all those “nonfoods” combined — magazines and pots and pans and cookbooks and school tablets and garden sprays and greeting cards — got no more attention than baked goods. Thirty years later, non-foods remain a stepchild of that supermarket chain. They are limited by their own classification system, by their definitions, by the structure they have put on their world.
The big department stores I worked for, companies like Macy’s, were equally off-center in their own way: they saw their world as divided into young women’s clothes, teenagers’ clothes, jeans, ready-to-wear, designer clothes, menswear, and the home store (appliances, furniture, books, stationery, records, sporting goods, pet supplies, toys, hardware, auto parts, tires, and sheets and towels). Apparel is where these companies made their money and their reputation. The apparel department was also where most of the top executives came from. The long collapse of many of these “home store” departments in the 80s and 90s could have been foreseen by studying a 1975 organization chart. Many of these categories were the fastest growing, allowing the creation of such companies as Toys “R” Us, Barnes & Noble, Office Depot, Autozone, and Home Depot. The department stores that really flourished, such as Wal-Mart and Target, did not run away from these categories, but they also did not start out by thinking of them as stepchildren in an apparel-centered map of the world.
Today, booksellers continue to define themselves as booksellers. But the customer often may be “agnostic” about the format in which “content” is delivered to them. They may want business information in an online subscription service; they may want bird guides as apps with sounds and pictures in their pocket; and they may want art books in hardcover form. The two things that booksellers really sell – information (or education) and entertainment (stories) – have a great future.
I have been talking to grocers who are in charge of the meat department. If they continue to define themselves as meat departments, they may miss out on the great opportunity called “meals” or “dinners.” That is, shouldn’t hot dog buns be sold next to hot dogs? And if I want a vegetarian meal for a change of pace, might such meals be most successfully marketed as an alternative in the same “department?”
Today articles about the education industry go on and on about universities and schools. But among the strongest “competitors” in the education industry are the A&E channel, the Public Broadcasting System, Barnes & Noble bookstores, Amazon.com, the public library network, museums, and DeVry University. Articles about health care focus on hospital, insurance, and pharmaceutical companies, but aren’t Whole Foods Market, GNC, Gold’s Gym, Pepto-Bismol, Colgate, and Walgreen’s also important parts of our health infrastructure?
When you use the phrase “making my investments,” do you mean just investing cash, or do you also value your time and energy? When I form new enterprises, my investment in time and heart is several times as great as my investment in money, no matter how much money I put in. When I borrow from the bank to take a learning trip overseas, I believe that I may be earning the highest “return on investment” of anything I could do with these funds.
Every time we stick a label on something or someone, we are classifying them. Some retailers call their customers guests. This may lead to a positive mindset about the customers. At the other extreme, large “power and light” utilities refer to customers as “ratepayers.” It is unlikely such a company is prepared for a deregulated world in which customers have real power, in addition to some new light on the rates they pay.
One of the most misleading classification systems that we grow up with is the division the world into politicians, lawyers, doctors, dentists, writers, ministers, educators, gardeners, and businesspeople. If you study the greatest businesspeople, they were often people with a very specific craft. Allen Neuharth, who created USA Today, was a newspaperman, one of many greats in that industry. Walt Disney was an animator-turned-dreamer. Lee Iacocca was a car guy through and through. Bill Gates is a nerd.
These people are no more or less “businesspeople” than the lawyer who runs a giant law firm, the doctor who runs a medical clinic, or a university president. They are leaders of people, trying to get things going in the same direction, trying to build their enterprises, trying to make their dream of the future become real. Walt Disney could no more have run a bank than Madonna. Yes, there are people who are purely “great managers” — Harold Geneen and Jack Welch come to mind — but they do not outnumber history’s great merchants, great inventors, great marketers, great broadcasters, great hoteliers, great publishers, and great engineers.
It is just as bad to lie to ourselves about the definition of our own enterprise. If you are an insurance company but call yourself a financial services company, you’d better not be just an insurance company. Are you cashing checks, taking deposits, paying interest, trading stocks, or helping with taxes and accounting? Those are all financial services. If you’re not providing at least some of those services, you’re misleading yourself.
If you start your search for understanding with bad definitions and classifications, you will not learn what you hope to learn. When you first begin to think about any subject, take a hard look at how it is defined. Study the generally accepted categories, the way people normally divide things up. Is it a logical system? Is it an inclusive system that takes into account all of the players?
If the definition other people are using is wrong, if it is not robust enough, discard it and think up a better one. You cannot afford to build your whole structure of understanding on weak foundations.
You may not be able to afford to see the world in the same light as everyone else. In fact, your very success may depend on seeing things in a whole new light.
For further thought and study:
Here is an idea to open up your conceptual thinking: take each subject or thing you are thinking about. Consider that it is a part, component, or subcategory of something larger – what is that “parent” category? Then consider also that it is made up of smaller components or subcategories – what are those “child” categories?
The most powerful tool for thinking conceptually and for seeking ideas is Roget’s Thesaurus, organized by ideas rather than alphabetically (“dictionary-style”). These books contain a full alphabetical index in case you need it. Among the best, a perennial bestseller, is the latest edition of Roget’s New International Thesaurus. Look up whatever idea or subject you want to understand in the index, then go to those pages and drift around the preceding and following pages, to see thousands of ideas that are related and may provoke further ideas. (This thesaurus is also my go-to tool for naming brands and companies.)
This type of thinking is closely related to general systems thinking, which encourages a holistic view of our experience. Among the many books available, I think General Systems Theory by Lars Skyttner is the best and most comprehensive quick introduction.
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