Volume 44: Tesla, Un-pigging the lipstick & what is a strategist?

1. S3XY. Tesla’s product portfolio named by a 13-year-old.

tl;dr: EV market about to get interesting.

It’s probably more an indication of how geeky I am than how prurient Tesla is. I’ve wondered multiple times why their model names seem so weirdly disconnected. First the S, then X, then 3 and now Y. Of course, I should’ve realized that when added up these letters are an anagram of S3XY. How teen engineer of them.

The latest sales figures for Tesla are pretty sexy though. Selling 139,000 new cars in their 3rd quarter, with the newer and cheaper models selling much faster than the older and more expensive variants. (The Model 3, for example, outsold all other cars, gas or electric, in September in Switzerland). Go beyond the obviously impressive growth figures for a second (50% more than the pandemic hit 2nd quarter) and we see a maturing business facing a couple of challenges they haven’t faced before - first that the S and X are getting a bit long in the tooth and will almost certainly require a major update soon. The better technology and design are in the cheaper cars, which means Tesla is almost certainly cannibalizing its own sales. This isn’t in and of itself a bad thing when Tesla’s stated goal is to be a mass manufacturer of electric vehicles, but it does have the distinct potential to become a bad thing if we factor in competition...

All cars will go fully electric, it’s just a matter of when. Up to now Tesla has been the only game in town, but that’s about to change spectacularly.

In addition to the paltry selection of electric cars already on the road, a bunch of new models are waiting in the wings from both new manufacturers like Polestar and Rivian and established automotive brands like the new VW ID4, Mustang Mach-E, Mercedes EQS and EQE, Audi E-Tron GT, BMW i4, Cadillac Lyriq (bizarrely named after a thermostat), and the all-new electric Hummer (dripping with irony that one).

Now, this isn’t to say that Tesla won’t continue to lead because they have a huge first mover advantage and vastly more equity capital to play with than anyone else, but for the first time Tesla is going to face major EV competition from bigger and stronger automotive brands with vastly better products than they’ve delivered before (even if they don’t have the frothy market valuation of Tesla, there are bigger brands than Tesla in the automotive space). And suppose we believe the data that brand scale tends to directly correlate to sales. In that case, Tesla will probably have a harder time than many realize in sticking to the growth trajectory its market valuation is predicated on. While its clearly going to be a major player, which was not guaranteed even a year or two ago, the sheer scale of competition makes it highly unlikely that Tesla will become the globally dominant automotive company.

Predictions? Well, a bit like Amazon before it, I think the days when Tesla did not advertise its products or its brand were very limited. It needs to make smart use of that mountain of equity capital, which means not just that they’re likely to be buying other companies, but as competition increases they’re going to be doubling down on the Tesla brand too.

2. Excite people about tomorrow, don’t Frankenstein yesterday.

tl;dr: Some thoughts on merger branding.

Last week, I chatted with a company that’s being formed from the merger of several other entities, with more likely to follow. It’s not an uncommon ask these days, as rolling up businesses is a common strategy pursued by both public and private equity-owned companies alike.

However, the conversation was a timely reminder that the way we think about brands for corporations and the way we think about brands for CPG/FMCG products are rather different. I’ve written before that way too much of the academic and practical thinking about branding is dominated by the slice of the economy represented by things like shampoo, toothpaste, tampons and hydrogenated fats in a foil wrapper.

However, when we’re talking about the rollup of multiple businesses into one, the primary audience isn’t really the customer, it’s the employee. Or, let me be more specific, the primary audience will ultimately be the customer, but first we must get the employees on-board and bought in. And that requires we do three things very consciously:

• Beware the Frankenstein’s monster that is the past.

• Orient around a compelling vision for the future.

• Engage and elevate the believers.

What do I mean by this? Well, the first watchout with any merger or rollup is to avoid the temptation to blindly bring a disconnected past forward, mangle it together, and then call it the future. Take the United Airlines logo after merging with Continental as a visual metaphor. A crappy mashup of the past almost perfectly telegraphing the crappy reality customers subsequently suffered. Why? Because there was no genuine attempt at a shared vision for the future, just a political cobbling together of the past in a way that reinforced past cultural allegiances instead of jumping off from them to something new. As a counterpoint, the opportunity is to acknowledge the past and seek to understand the root DNA of the piece parts, then use that as a jumping off point toward a new vision that is very much focused on what is next, not what has been. Especially those things a newly merged entity can do that none of the individual pieces could’ve achieved independently. And finally, when it comes time to execute, you need to focus all your attention on the people who believe in where you’re going. Waste energy and cycles on the naysayers and infighters and they’ll drag everything down. Instead, engage and elevate the believers and they’ll bring the fence sitters along and push your business forward.

3. Lipsticking the pig or pigging the lipstick?

tl;dr: Brand, UX, aesthetics and value creation.

Spend any time around designers focused on branding, and you’ll hear the term “lipstick the pig” or some variant, usually early and often. It’s the ultimate put-down of their work, basically stating that all they’re doing is making something ugly look pretty.

Spend time with designers focused more on UX, and you hear the opposite. They don’t see themselves in the lipstick business at all. They talk about seamless, simple, beautiful, elegant experiences that place the user at the center of everything they do. Often caring little for what the brand designers have done and taking the attitude of “just give us the logo, the fonts and the colors and leave us alone.”

Here’s the problem though. If brand design can legitimately be accused of lipsticking the pig, UX design is all too often pigging the lipstick.

Unfortunately, much UX thinking has become captured by the mentality of engineering, which views design as little more than its execution wing. This inevitably leads to it becoming boring, functional, predictable, uninteresting, commoditized, non-innovative, and utterly lacking in creativity.

OK, so I’m ranting. Why does this matter? Well, aside from it being high time we blew this up (and some already are), aesthetics as a source of value creation is a distinctly under-appreciated art. If you look at luxury and premium brands, both are incredibly adept at generating price premiums enabled by distinct aesthetic codes that are managed rigorously. If we hone in on the most valuable company in the world, we see this in action—a distinct and proprietary aesthetic as a means of driving value and price premium.

Look around at the broader brand landscape, though, and you’ll see that most don’t have much of a distinguishable aesthetic quality at all. Then, if we dive into the digital environment, we see whatever might have been there disappear almost entirely as aesthetics in digital tend not just to be missing but actively shunned.

So, here’s the thing. If you’re on the branding side of the design business, taking the attitude that all you’re doing is “lipsticking the pig” just reinforces the fact that what things look like and feel like don’t much matter when actually they can matter a lot, especially if the lipstick has the potential to be the most valuable part of the pig. And if you’re on the UX side, you have a huge opportunity to break through the sea of digital same by translating the brand’s aesthetic choices into something unique in the experience and un-pigging the lipstick in the process.

4. What the hell is a strategist anyway?

tl;dr: Brand strategy a priority. Who does that?

Every year, Gartner releases its survey of CMO priorities. For the first time, brand strategy tops the list, with 33% of CMOs claiming it’s one of their top three priorities. This is quite different from 2019, when it ranked bottom.

So, why is this you may ask? The obvious answer is that a global pandemic wrought havoc on previous plans, necessitating a fundamental review of priorities across at least three dimensions: Changing customer behaviors, changing innovation requirements, and changing resource allocation necessitated by reduced budgets. And that, frankly, makes a ton of sense. (I do, however, have an additional theory which is that one man self promotion machine, Scott Galloway (AKA Prof G.) has made brand strategy cool in the eyes of many a CMO listener to his podcasts)

So, if brand strategy now matters, who do you hire to do that kind of work? Do you hire a “strategist?” Speaking for myself, I’ve worked in the branding field for 20 years, including leadership of a strategy group, and and I’ve deliberately never framed myself a “strategist”. It’s simultaneously too broad and too narrow to be useful as a term. But the past five years have seen an explosion in the numbers of people who throw the term around with abandon, so it bears some focus on what it is and what it is not.

First, whenever anyone refers to themselves as a “strategist,” your first question should immediately be “what kind of strategy?” Unfortunately, “strategist” has become as fragmented a term as marketing. You may find people then telling you their focus is on things like “content strategy”, “social media strategy”, “digital strategy” or that most ambiguous of all terms “creative strategy”. Whatever the terms used, please realize that often what “strategists” are good at might not actually be strategy at all but the application of a strategy. A social media strategist, for example, might be incredibly valuable, but they’re unlikely to be qualified to define your brand strategy; instead, their job is to figure out how to effectively utilize social media to deliver the strategy across that particular set of channels.

Then there’s the next layer to this onion. Are you talking to a “strategist” who guides strategically important decisions for the brand, or is this someone that primarily services a creative team responsible for a creative output? The difference is simple yet profound. The former gets close to the business and focuses on helping clients define strategies that enable them to set direction, allocate resources and make critical strategic choices to drive their business. The latter primarily identifies insights that help direct and improve the quality of a campaign, an identity, or a specific creative output. While both can be valuable and there can be some overlap, they’re far from the same thing, which creates terrible confusion when the term “strategist” is used interchangeably across both.

All told, strategy as it pertains to brand and “strategist” as as a means of self-identification is unnecessarily complex and hard to navigate, crippled as it is by the sheer ambiguity of its definitions. I’ve been doing branding and brand strategy work for a long time. I still find it hard to decide what most people referring to themselves as “strategists” actually do, whether or not they’re actually strategic, whether they have the skills and experience to deliver a brand strategy to a high degree of fidelity, and if they do, for which kinds of brand their approach is best suited. Goodness knows how clients are expected to figure it out.