March 18, 2007

Tribal Knowledge

Tribal Knowledge can be loosely defined as the organic wisdom obtained by a group of individuals working on a shared objective.

For instance, assume that three individuals start their own online/catalog direct-to-consumer business. These three individuals give everything they have to growing this business. They hire folks, they pick the merchandise, they run marketing, they develop all the internal processes that cause the business to exist.

At some point, this team cannot grow the business without external support. They sell to another organization. The new company evaluates the business they acquired, and decide there is redundancy between this merchant and previously acquired business units. The folks who started the acquired business are let go. The acquiring corporation assigns new leadership to the fledgling brand.

During the course of the next eighteen months, the fledgling brand doesn't grow. It struggles.

A Direct Marketing President recently told me that "... customers don't buy from brands. They ultimately buy from talented individuals who possess tribal knowledge. When the tribal knowledge is gone, the reason for customers to purchase from the brand is gone. Businesses are nothing without people."

What do you think of the concept of "Tribal Knowledge", as described in this online/catalog business example? Have you experienced situations where Tribal Knowledge was removed from an organization? What happened when the knowledge was removed?

Here's another interesting question: What is more important to a business, the "brand" itself, or the "people" who work for the brand?

Your thoughts?

6 comments:

  1. You're always boiling down the question to an either/or proposition that doesn't work for me :)

    Example: I buy from Amazon, and it has nothing to do w/ the "brand" (whatever that might be), and I've certainly never met anyone who works at Amazon.

    I want a low price (not necessarily the LOWEST) and a no-hassle purchase and return experience.

    Your "direct marketing president" is a dinosaur who clings to the old world notion about customers having to have a personal connection with "someone".

    Online brokerages, online booksellers, and plenty of other online-centric firms have plenty of loyal and satisfied customers who have never talked to -- let alone met -- anyone at those firms.

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  2. Ron, in your Amazon example, the reason you're buying from Amazon is because Jeff Bezos created a low-price, no-hassle purchase and return experience that didn't exist prior to the mid-1990s. Some day in the future, when he's no longer providing the vision for what Amazon.com is, is it the same company, and do sales continue to increase? I guess thats what I'm trying to convey.

    If you met this President, you might not find him to be a dinosaur. I only let you know one quote from his entire arsenal of opinions and knowledge. You might just find him to be an opinionated person!

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  3. Anonymous5:44 PM

    I have to humbly disagree. Consumers don't do business with channels, they do business with brands. If the former was true, then all those .bombs would have won in the end, unseating all those old economy retailers (my favorite - kneehighsocks.com). I might buy from my local Lowe's because I find the experience superior to Home Depot. As a result, I am much more likely to shop lowes.com as opposed to homedepot.com.

    So, with that said, I do believe brands are a reflection of the tribal knowledge that created them. Home Depot is a prime example - remove the tribal knowledge (i.e. the founders), insert a new management team (i.e. dictatorial GE-types), and the result is a damaged brand with declining sales & share. NIKE was another example - Phil Knight moved aside, Martinez comes aboard and business suffered. There are countless other examples...

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  4. So Anonymous, it sounds like you are suggesting that a "brand" is the sum of all the things we normally consider when thinking of a brand, plus the tribal knowledge associated with the individuals leading the brand.

    Is that a reasonable assumption?

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  5. Having conducted a lot of market research studies, I'm trying to imagine actually asking consumers if they prefer to do business with "brands", "channels", or "people".

    My bet is that the vast majority of everyday, average Americans would look at that question and say "huh".

    Marketers think in terms of "brand". You'll have a tough time convincing me that consumers do. People may like Doritos over other kinds of chips, but they don't do business with "Doritos", they do business with Stop & Shop (or whatever supermarket you've got out there).

    The reason the Dot Coms bombed had nothing to do with their inability to build "brand" -- and everything to do with the fact that they ignored the inalterable laws of supply and demand. Not enough people wanted to order knee high socks (or left handed golf clubs) online. It's as simple as that.

    And Kevin, if I might retract one of my statements, I should have said that the comment that the President made was a dinosaur-like comment, and not call the man himself a dinosaur.

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  6. Anonymous3:00 PM

    My apologies for the delayed reply...

    Kevin - in response to your question, yes, I do believe it is an important component. Do customers recognize or value it? Not overtly. But it does influence the elements that compose a brand. If the senior management at Zappos or Google or even Amazon were to change, I do believe the brand would change, maybe not tomorrow, but over time... look at what's happening in your old neck of the woods with Norm Thompson since the founders left the business.

    And to answer Ron's question, I believe he interpreted my comments far to literally. Using the line reasoning he suggests, companies would ask consumers, "so, what do you want?" and of course, consumers have no clue. It's a typical response from market researchers. There are the right questions to ask (such as "what problems do you face?" - http://www.strategyn.com/ ) and wrong ones. I think great brands are the ones that ask the right questions - and create sustainable differentiation in doing so. And more importantly, great brands have tribal knowledge in understanding customer want. .Bomb companies never understood that fact.

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