Category: Case Studies

So said the ‘Father of Management Theory’, Peter Drucker.

The Escher Cycle agrees.

Chapter 2 opens with the words, “Different people want different things, and the foundation stone of any business is the set of customer needs that it aims to satisfy. If it serves a lot of people with strong needs then there is potential to build a large and thriving business. The fewer or weaker the needs, or the more short-lived they are, the smaller, weaker and more short-lived will be any business that tries to fulfil them.”

Drucker says that the only two basic functions of any business enterprise are marketing and innovation.

The Escher Cycle agrees that these are two themes that run through the core of the book:

— Chapter 2, Satisfying Customer Needs deals with marketing, and the innovation required to keep up with changing customer needs over time.

— Chapter 3, Using Resources, deals with how to deliver the services that the marketing has defined or identified, and the innovation of that delivery over time. Continue Reading >

David Pemsel, deputy chief executive of Guardian News & Media, recently gave a short speech about the organisation’s strategy.

[You can watch the speech below (or read highlights here):]

As Pemsel says, what they are doing goes against all conventional wisdom. But readership and revenues are growing, and previous posts (on readers and advertisers) have shown how this makes complete sense when considered through the lens of The Escher Cycle.

This third and final post looks at the big picture: what David calls “the ecology of news provision”.

It examines The Guardian’s role within that space, by applying the thinking of chapter 7 of The Escher Cycle. Continue Reading >

Once you’ve read The Escher Cycle, examples of where it is applicable start popping up in the most unexpected places.

For example, in this month’s SuperYachtWorld (the global magazine for superyacht owners) there is an article about boatbuilders Feadship.

In 1978 they built the yacht Al Riyadh for the Saudi royal family. At 65m it remained for decades the world’s largest motoryacht. And when Steve Jobs wanted a superyacht, he selected Feadship to build it for him.

Does The Escher Cycle help to account for their success?

Continue Reading >

David Pemsel, Deputy chief executive of Guardian News & Media, recently gave a short speech about the organisation’s strategy.
You can listen to that speech here (highlights below):

As he says, what they are doing seems at first glance to be crazy. Giving content away for free goes against all traditional wisdom about what it takes to run a successful newspaper.

But the facts are that The Guardian has gone from being the seventh largest newspaper to the third biggest news website in the world. They now have online conversations with over a million people a month, revenues are growing, and they are developing strong new relationships with advertisers.

Seen through the eyes of received industry thinking their strategy doesn’t make sense.

But seen through the lens of The Escher Cycle it is very easy to understand what they are doing and why.

Our previous post looked at how giving content away for free is part of their strategy to ‘grow, deepen and retain’ relationships with readers/members. This is about applying The Escher Cycle’s ‘Customer Chain’ thinking (chapter 2).

This post looks at the changing relationships with advertisers, using the ‘Audio cycle’ thinking of Chapter 6 and the ‘fractal economy’ thinking of Chapter 7.

A third post looks at the implications for the company’s future deep strategy and the evolution of human culture. Continue Reading >

The Guardian used to be the seventh biggest newspaper in the UK.

Today it has become the third most read newspaper website in the world.

It has achieved this remarkable transformation by doing something that is complete anathema to the old paradigms for “how to run a successful newspaper”: it gives its content away for free.

But if we apply the thinking of The Escher Cycle, we can easily understand why this makes sense.

Deputy chief executive of Guardian News & Media, David Pemsel, recently gave a short speech outlining the organisation’s strategy. It contains a number of elements that resonate with The Escher Cycle.

The simplest of these is shown in the screenshot on the right. It is the ‘Customer Chain’.

Guardian News & Media now thinks about their readers in terms of ‘membership’.

Their strategy is to “Grow, Deepen, and Retain” that membership.

In David Pemsel’s own words, managing Membership “is all about how do we take the huge global reach, translate that into data [about who each reader is, what they are interested in], and how we then create communities of interest where we can then either make more money or start to create deeper relationships with our readers.” (This role will be headed by David Magliano, as MD for membership strategies.)

In Escher Cycle terms this is a classic ‘Customer Chain’.

Customers/Members move from not knowing about the paper, to becoming aware, liking, and trialling the newspaper’s content (‘fickle’ customers). As the relationship deepens, so the Guardian finds it useful to think in terms of two classes of ‘Loyal’ customers: ‘members’ and ‘advocates’.

Here is how the chain works for The Guardian:

1. First, the free content brings the company what it refers to as ‘Reach‘. The result for the Guardian is that the maximum number of readers get to try out the newspaper, get to know its style, and decide whether they like it.
2. Accessibility on any device lets readers share the stories they like, which brings what the Guardian refers to as ‘Referral’, which again increases reach (at low marginal cost to the Guardian).
3. As the members come to Know and Like the paper they start to sign in, and become what The Escher Cycle calls ‘fickle’ customers.
4. The Guardian learns more about them and guides them to become Loyal Members, either with existing content, or by developing new content specifically for them.
5. For the deeply loyal readership, the company creates ‘Communities of Interest’, comprised of people who are not so much ‘readers’ of the paper, but rather ‘Members’ of the global community who share the same kind of thinking as the newspaper.
6. The truly loyal customers become ‘advocates’ of the paper — an unpaid salesforce, if you like, but also the core ‘membership’ that the Guardian serves.
   The deep role of management at Guardian News & Media is now to ‘curate’ that membership — but that’s another story.

Unaware, Aware, Know and Like, Fickle Customer, Loyal Customer (stage 1 and 2) — these are the links along The Customer Chain that are defined by The Escher Cycle (chapter 2).

And here is how they map on to the Guardian’s own slide of that chain: