Table Stakes Matter More Than You Think with Dr. Chuck Bamford

0:10Welcome to Revenue Builders, hosted by John Kaplan and John McMahon. Dr. Chuck Bamford teaches strategy at Duke and Notre Dame and has written plenty of books on the subject. He founded Bamford Associates, a strategy consulting firm that's worked with some of the world's largest companies. And after all those years advising executives, he's learned something most strategy conversations miss entirely. Companies obsessed over the next big competitive advantage while their customers are walking out the door over broken billing, terrible support, and slow responses. Chuck calls these table stakes.

0:42They're the fundamentals every company has to get right just to stay in the game. And until you do, your innovation doesn't matter. In this clip, Chuck walks through why leadership teams get this backwards and what actually separates the companies that scale from the ones that don't. Let's dive in. Where do people go wrong with strategy just at the top level and give us good grounding for the rest of the conversation? You know, I think, John, they just they they they use kind of their past or face validity and just decide on to do something. I think that every new idea that comes across the table looks like it's fun.

1:21And so let's go invest there. And then, oh, shoot, it didn't work. Or it's more fun to kind of put stuff together. And it's not fun to actually implement it and get all the employees and the organization focused around it. So I think that it's just viewed as not a process. It's viewed as just something that you're endowed with. There you go. Or an event. Oh, that's the worst, right? We're going to have our strategy event and then thank God we're done with that and we can get back to work for the other 363 days. Hey, Chuck, we a lot of listeners here, you know, are in the software world and, you know, the software world was once perpetual licenses.

2:06Now it's software subscriptions soon move into pure consumption, just like a utility. And, you know, what you said is half the strategy is not frustrating customers while the other half is your competitive advantage. And a lot of these companies, as Johnny knows, focus heavily on competitive advantage. And then what happens is they don't focus as much on client success, yet they expect to get the renewal for the subscription. And because they do frustrate customers, because they don't put enough attention on client success, the churn numbers rise. You know, they start losing customers. And as much as that happens, you know, I still don't see the type of attention that I think you should have in this world on client success.

2:53And you see it in the everyday services that we use, whether it's a cable company or some of the other service companies that, you know, we all use. You get so frustrated. Even though you like the service, you get so frustrated with the, you know, customer support or client success. You want to change just because of that. Hey, Chuck, let's, Johnny's on a huge point here. And it's, this was a big takeaway for me, Johnny, when we worked together with Chuck and he called this, I wanted to dig into it, the orthodox versus the unorthodox. and basically he's going to talk about the table stakes. But Johnny, what you're talking about is, you know, we're out there thinking we're killing it.

3:36And there are some basic expectations, table stakes that we were lacking. But we had some really good competitive advantage in other areas. But until we went and, as you said, really kind of got eyeball to eyeball with customers, we found a big gap in the orthodox so Chuck um I don't want to give away the punch line or whatever but could you talk about what you mean by orthodox and this one was this one was a big epiphany for me because you know I'm looking for a competitive advantage unique innovation and you got us focused on you know where how do you know you're not frustrating your clients could you talk about how you came up with the concept of orthodox and unorthodox.

4:22Yeah, I wish. Thank you very much. I wish I could claim that I came up with it. But it has been it's it it's been one of the foundations of a lot of the strategy researchers that strategy has got to be so much more than just cool new things. It's got to be making sure we're doing all the things that we're supposed to be doing well. And so the it's it's a it's a problem when our competitors are above us, when we're below the median relative to our competitors on just fundamental things like how we do billing or how we do invoicing or how we respond, how fast we respond to the customers. I always say when you walk into a bank, you expect to see a teller back there behind a thing and you expect to have a box and you expect to have carpeting in there or tile and lighting.

5:18And there's all these things. And none of it is why we chose that particular bank. But if it's not there or if it's done badly, we get frustrated. And there's a line that goes that in a restaurant, I think I probably use this with you, John, right? The line to go to a restaurant that if the silverware is dirty on your table and you didn't get your drink for 20 minutes, it doesn't matter whether Bobby Flay himself delivers the food to your table, you're frustrated and you may not come back. So table stakes things are relative to our competitive set, who we're being compared to, but those table stake things all have to be relatively at median for us to then have cool things that'll really separate us.

6:09But Chuck, in your experience, then why do so many custom companies focus on selling the product, but not, you know, supporting the customers? Why is that? I think it's hard, John. I mean, you all, you all with what you do, you deal with this all the time. I find that a lot of leadership wants to come up with these great ideas, but they don't want to implement it. And then once you already said it, once you have your customer, We're like, oh, good, we've got them. No, right. The customer, the client is sitting out there and they're comparing us all the time to our competitors and to what else they could do as substitutes.

6:48And I think that it's just it's hard daily work that people just don't want to. They don't find it fun and they don't want to do it. Johnny, I have a hypothesis and thinking about this with the world that you and I live in and technology and so many of the great technical minds, like they came to their company, they came to their product with great technical innovation. Um, and so the, you know, the first thought is, you know, having that innovation, innovation, innovation. And, you know, what we find in the work we do at force management, as you well know, John is, you know, most times you have to change that customer's outlook from inside out.

7:37You know, it's all about the product and then from outside in and what's the buyer journey. What is the customer experiencing? And I know it sounds trivial, but even the work we did with Chuck, we had to go back to the basics and get close to our customers. So, Chuck, how do people actually do this? How do you suggest they do this? So, first, you got to make sure you're not frustrating your customer. First, you have to understand the buyer journey. What are some ways that you've seen companies do that really, really well? I like to start with the company, people in the company first and then go validate what they find.

8:23So I like to pull everybody together and say, whom are we being compared to? So I always start with what we call bump competitors, right? That is, if we win the deal, who lost the deal? Or if we lose the deal, who won the deal? Who do we bump up against all the time? And then whom do we see as proxies for doing something unique or doing something special? And then I send them out and I say, let's go find out as much as we can about these companies. And John, you and I have talked about this before. I'm stunned and felt little executives know about their competitors and why their competitors win.

9:02And I told him, I said, I don't care about how many employees they have or what their revenue figures are. What I care about is why do they win business? What do you think they're doing that helps them win business? And really analyze what that's going on in the competitive set. I think my take is generally we cannot do strategy by sitting in a room. Strategy has to start out where the customer starts, and they start by seeing all the possibilities and all the substitutes are not doing it at all. They see all those things. And that's where we have to start in our comparison. And then it's got to be validated, right?

9:40I've got to go validate this with clients. I've got to make sure we're not kidding ourselves. But rather than start broadly and go, you know, oh my gosh, it's everything. I want to narrow that list down. And I always tell people, don't get more than five or six competitors in your list. Make sure they're good proxies for things because you'll kill yourself with analysis.

10:04Dr. Chuck Bamford: Thanks for listening to today's episode. If you enjoy the content, please subscribe, rate, and review the show to help us reach more people. This show is brought to you by Force Management, where we help companies improve sales performance, executing the growth strategy at the point of sale. Check out forcemanagement.com for more information.