Christmas Tidings

Two lessons we might learn from Christmas

For many of us, especially expectant young children, Christmas is a day of high expectations.  It can often fall short of the mark.

Santa may have brought you an Xbox when you had desperately wanted a Playstation. Or perhaps you got a new Samsung tablet, when you were busting for the new iPad instead.

It can be painful when reality falls dismally short of our idealized vision of the future.

The cynic might respond simply that these are “first world problems”, but the issue is not quite that simple. Disappointment, at times, is felt by all of us.

With expectations high, and disappointment almost inevitable, it seems like as good a time as any to reflect on the true meaning of Christmas, and what it might teach us about business.

We have two thoughts to share with you.

The first one is about gratitude. You won’t always get dealt the cards you wanted.

Santa may have brought you some gifts, but they may not have been the ones you really wanted. Disappointment naturally follows from expecting more than you were given. You set the bar quite high, in your own mind, and Santa failed to deliver.

A different response to the same situation would be to feel gratitude, thankful for whatever you have. While nice presents are always wonderful, you set no expectations of receiving anything from anyone, and so even the small gifts that you received can be made to feel wonderful.

We have never heard the word “gratitude” used in a business context, but it has some surprising implications. Take for example Clay Christensen‘s famous research on disruptive innovation in which he looked at the ability of inferior new market entrants (e.g. mini mills in the steel industry) to displace powerful and well established incumbents (e.g. the integrated steel mills).

Clay explained it this way. The process of disruption is made possible because the large incumbent firms are pretty much always happy to sacrifice the bottom of the market, with its lower margins, in order to pursue even higher returns upmarket. By abandoning the bottom of the market, the new entrants are able to gain a foothold from which they can move upmarket, eventually displacing the formerly powerful firms that had dominated the industry.

The large players have high profit expectations and, as a result, are not grateful for low margin business. They are happy to abandon it. The new entrants, in contrast, are delighted with these scraps of work, since small profits are better than nothing.

Looking at it this way, we can see that lack of gratitude for the opportunity to serve the bottom of the market appears to be a factor that contributed to the bankruptcy of integrated steel mills in the 1990’s and 2000’s.

Christmas is a time to remember the value of gratitude.

It is also, as it happens, a time to remember the value of giving.

You may have received lousy gifts: business socks, jelly beans, or a gift voucher. The spirit of Christmas, though, is about giving gifts, not receiving them.

For many years this seemed to us to be a very strange custom. Receiving presents is obviously nice, and so why the focus on giving?

The lesson, it now occurs to us, is that giving allows us to strengthen our relationships with the people we care about.

At Christmas time, we give gifts and send messages of good will to family and friends. These gifts and heart felt communications help to bring us closer together.

Generosity, though, is not just a feel good notion that should be reserved for Christmas, it is also an important ingredient for sustaining and growing profitable businesses.

Every year, major brands spend billions of dollars to communicate with us. Nike reminds us that victory and success are possible, “Just do it!”. McDonald’s sends us messages of happiness and love, “I’m lovin’ it!”. And Coca Cola reminds us that the holidays are coming.

Marketing is often misunderstood and misused to spam people about new products and price discounts. Successful businesses have realized though that people don’t just buy products, they buy products from brands with whom they have an ongoing relationship. They buy products from brands that they know and trust.

Throughout the year, as they do every year, successful brands will find ways to reach out to the people they care about, to make connections, and to keep the relationship alive.

Merry Christmas! May you have a prosperous year ahead!