Snatching Defeat from the Jaws of Victory

By Kelly Riggs

This past week the OKC Thunder managed to squander a 3-1 series lead over the Golden State Warriors in the 2016 NBA Western Conference Finals.

As a fan, that one was difficult to swallow, although, to be fair, it’s not unheard of. It’s the tenth such comeback in the history of the NBA playoffs, and let’s face it, Curry & Co. are pretty freaking amazing.

Still, I can’t help but think that the Thunder managed to snatch defeat from the jaws of victory. They took a game from the Warriors on the road, pummeled them twice at home, and had tremendous momentum to go with their 3-1 series lead.

And then they went all “Wendy’s” on us…

Say what?

In 1984, Wendy’s introduced a stunningly popular television commercial that featured a grandmotherly old woman named Clara Peller. The tag line of the commercial – delivered in a way I think only she could – was, “Where’s the Beef?”

Bet you remember it.

That one TV spot led to a record sales year for Wendy’s. In fact, they were absolutely kicking the crap out of McDonald’s and Burger King. Revenue jumped 31 percent in 1984 alone, and 1985 registered yet another sales record, tacking on another 19 percent of revenue growth.

But by 1986, Wendy’s was in trouble.

“In retrospect, we were reading our own news clippings maybe a little too much,” says [Wendy’s Sr. VP Denny] Lynch. Management started cutting corners. The chain rolled out a misguided breakfast menu that tested well in trials but ultimately failed to turn a profit: Its elaborate, made-to-order French toast and omelets didn’t mesh with a fast food audience, many of whom wanted to eat on the go. The cumbersome breakfast effort marked a turning point in the Wendy’s narrative. By December, 20 percent of the company’s stores teetered on the edge of bankruptcy.

Oops.

Talk about snatching defeat from your victory.

There was the strategic error – the burger-place-turned sit-down-breakfast-venue misstep – but there was more to the story:

“Breakfast was failing and there were big shifts in the marketing department,” stated [Wendy’s] franchise owner Bob Goodrich. “We were floundering and didn’t know where to go.” In addition, the quality in some of restaurants had declined, because the original owners had sold them to people who did not operate them personally or care about the company’s standards. By the end of the year, company morale was sinking and one in every five Wendy’s franchises was in danger of bankruptcy.”

Bankruptcy?

Geez. From record sales to near bankruptcy in two years?

Yup, that’s what happens when you throw bad customer service on top of bad strategy. Instead of capitalizing on their success, the folks at Wendy’s got careless. That’s one way to go bankrupt! It may or may not be listed under the top reasons people file for bankruptcy, but it sure is one that shouldn’t be replicated.

Hmmm…sounds a bit like the end of Game 6…but I digress.

There are a couple of invaluable lessons inside the Wendy’s story:

First, it illustrates the power of taking a competitive advantage and highlighting it the right way.
At the time, Wendy’s was putting more beef in their hamburgers than their two main competitors, so they chose to emphasize the point in a humorous fashion that targeted McDonald’s and Burger King, but didn’t name names.

So, imagine if the commercial spot had said this instead:

“Our burgers have 50% more beef than the other guys.”

Interesting?

Vaguely.

Memorable? Not so much.

Companies tend to rely on the same worn out phrases when they describe what they mistakenly believe are competitive advantages:

• “Our quality is the best in the industry.”
• “Our service is unmatched.”
• “We truly care about our customers.”
• “We’ve been in business 50 years.”

Who cares? Everyone – and I mean everyone – says exactly the same thing. So, how differentiated do you think you are in the mind of the customer?

Second, this story forcefully describes the results of failing to really take care of your customers.
The most powerful competitive advantage imaginable can be squandered if you don’t deliver your product or service well. Nowhere is this more easily illustrated than in a restaurant. If the food is good and the service is poor, what do you tell others about the restaurant?

Even if you admit the food was fine, you’re enthusiasm will be tempered by the poor service. Ultimately, your recommendation will be to try someplace else. Sure, you might give the restaurant a second chance, but two strikes and they’re out.

There is no such thing as three strikes when it comes to disappointing your customers.

I hope the Thunder understand that.