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 / Autumn 2007 / Issue 48(originally published by Booz & Company)


See for Yourself

Prepare to Learn
In his autobiography, Wal-Mart founder Sam Walton commented, “Most everything I’ve done I’ve copied from someone else.” Walton, like other great leaders, was a true student of his industry, always seeking out new learning opportunities. A commitment to “go and see” is merely a first step. Louis Pasteur’s comment that “fortune favors the prepared mind” leads us further along the path of capturing the full value of direct observation.

Consider the experience of a U.S. automotive supplier that ex­changed benchmarking visits with a Japanese competitor in the late 1980s. Executives of the supplier clamored for spots on the trip to Japan, but because they had not spent sufficient time observing their own factories, the visit became a boondoggle that yielded limited competitive intelligence.

In contrast, the Japanese contingent, made up of experienced managers and engineers, arrived in the U.S. equipped with cameras and tape recorders. Though the Japanese immediately accepted the prohibition against cameras, they pleaded the case for tape recorders on the grounds that their English was limited and that they’d need to review the tapes to ensure that they fully understood the host’s commentary. Because the host was unable to speak Japanese and could not conduct the tour in the guests’ native tongue (the Japanese hosts had led their tour in English), he felt he had to accede to their request.

Moments into the tour, one of the guests asked about the cycle time and capacity of a key piece of proprietary equipment. The host refused to answer the question, but he realized that the Japanese would capture the necessary information by simply replaying their tapes and timing the sounds of the machine as it cycled through its processes. Worse yet, halfway through the tour the host discovered that the tour group included industrial artists who were busily sketching detailed perspective drawings of key pieces of equipment.

Look for Problems
Although benchmarking visits may suggest a focus on solutions, the real power of observation comes from finding the problems. Accordingly, more and more companies have come to embrace ethnographic research, which helps identify problems faced by customers.

Disney “Imagineers,” members of the creative group responsible for developing park attractions, spend substantial time in the company’s various theme parks watching guests. Such observations have led to creative solutions to the inev­itable problem of waiting in line. One of Disney’s latest attractions, Expedition Everest, includes a mu­seum dedicated to the legend of the Himalayan Yeti. The line for the new roller coaster wanders through the museum, distracting the waiting guests while providing the foundation of the story undergirding the upcoming ride, where the guests will encounter a broken track and be forced to flee the savage Yeti.

Honda engineers have also observed Disney’s guests to uncover problems, but in the parking lot rather than the park. A couple of decades ago, the company’s car de­signers noted that people were struggling to lift awkward items such as baby strollers into and out of car trunks. Inspired to solve this problem, the team lowered the trunk opening to be flush with the car bumper. The lower opening is now a common feature among sedans, but in 1989, innovations such as this helped propel the Honda Accord to first place in U.S. unit sales, and similar innovations derived from observation have allowed it to sustain more top 10 rankings in Car and Driver than any other model in history.

By observing “snacking occasions,” the Mars Corporation found that kids often made a mess eating candies packaged in bags and boxes, like M&M’s, while riding in the car. Mars then introduced cup-shaped packaging that fit in cup holders and had a resealable opening that let parents parcel out the candy in smaller servings.

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