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Fix It–Even If It Ain’t Broke

When something works, people grow fixated on it. They stop looking for alternative options. And this fixation creates an opportunity for those willing to reconsider the accepted approach. The company I introduced last week, Rosetta Stone (RST), hasn’t been satisfied with the fact that its products work. Instead, it continues to challenge the norm.

When something works, people
grow fixated on it. They stop looking for alternative options. And this
fixation creates an opportunity for those willing to reconsider the accepted
approach. The company I introduced last week, Rosetta Stone (RST), hasn’t been
satisfied with the fact that its products work. Instead, it continues to
challenge the norm.

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In 1995, RST executives
decided to bundle their language tool products and sell the package for $300,
which was much more expensive than their competitors’ price tag of $5 to $20.
If they accepted that the only way to sell language tools was through
bookstores and catalogs, like their competitors were doing, it would be almost
impossible to sell a $300 product. People are unlikely to put that much money
on their credit cards after only reading the back cover of a box.

Recognizing this, RST had to
either give up its $300 pricing strategy or diverge from industry norms. It
dared to veer. RST headed for the mall and airports. It lined up its high-end
language learning software with other kiosks hocking sunglasses and hair
extensions.

RST seemed perhaps a fish out
of water – $300 software next to $20 sunglasses – but this is precisely what a
smart strategist wants. Because the fish
out of water has no other fish to contend with.

The strategy worked. RST’s
well-informed sales people could walk customers through its unique product,
addressing in full detail the concerns that stand between curiosity and
purchase. These kiosks also allowed the sales person to show potential
customers the software and process that makes RST so effective.

“We needed to open places
where we could demonstrate the products,” says CEO Tom Adams.  “So we
opened kiosks. We bet that if we demonstrated it to 10 people, five would buy,
because they’d get it.”

This pattern of taking the
unorthodox path has worked for millennia. Genghis Khan used it often to
surprise his opponents. They expected he would come over the flat land, while
he marched his men over mountains and frozen lakes to appear out of nowhere at
the back door. This approach also gave Dell a two-decade-long competitive
vacuum, for others would not risk upsetting retailers to sell directly to
end-users.

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RST’s kiosk strategy may keep
competitors out of the way for a while. It may take a few years for them to
copy. But what may offer long-term value is the company’s willingness to veer
from the orthodox path. Tom says, “If everyone is telling you not to do
something, it is very likely the right thing to do. My theory is ‘do the
opposite.’”

If this is true, if RST can
make the propensity for the unorthodox part of its DNA rather than a one-off
strategy, it may repeatedly surprise the market for years. Ask yourself the
questions below to see if you can find an uncharted path to success.

1.    What path are
others fixated on because they assume it is the right one? 

2.    What ideas do I
have to change that approach?

3.    How can I make things
better, faster and more efficient?

4. How
can I research my ideas without spending a lot of money upfront?

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About the author

Author of Outthink the Competition business strategy keynote speaker and CEO of Outthinker, a strategic innovation firm, Kaihan Krippendorff teaches executives, managers and business owners how to seize opportunities others ignore, unlock innovation, and build strategic thinking skills. Companies such as Microsoft, Citigroup, and Johnson & Johnson have successfully implemented Kaihan’s approach because their executive leadership sees the value of his innovative technique.

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