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Starbucks, Bob Dylan, and the Case for Incompetence

By Mac Greer
December 13, 2006

Can Starbucks (Nasdaq: SBUX) stay small while getting bigger? Should McDonald's (NYSE: MCD) really promote a movie about Un-happy meals? And what can companies learn from Bob Dylan's incompetence? Just a few of the questions I recently put to business and marketing guru Seth Godin, the author of seven international best-sellers, including All Marketers Are Liars and his newest book, Small Is the New Big and 183 Other Riffs, Rants and Remarkable Business Ideas.

Starbucks and thinking small
I began my conversation with Seth Godin by asking him about the book's signature essay. Godin says that it pays for big businesses like Starbucks to think small.

Mac Greer: Seth, the book is a series of your essays, so I want to present you with a few different themes that you write about and have you elaborate and let's begin with the title, Small Is the New Big.

Seth Godin: Well, you know, big used to matter: big buildings, big marketing budgets, big lists of employees, big assets. That was how you succeeded for 50 years. The Fortune 500 was all about being big. All of a sudden in the last five years or so, big has stopped mattering so much. Big TV networks are getting beaten by people who make a video a week or big lists of employees are getting beaten by highly leveraged, small, low-overhead organizations, and big office buildings aren't as comfortable or profitable as working from home or near where you live.

You go down the list and what you discover is, in fact, it doesn't really matter how big you are; it matters how big you think. Companies that act small, that treat people with respect, that treat people as individuals, that understand that their prospects and their employees and their customers have a choice -- those people are succeeding, and people who insist on demanding things because they are big, fail.

So what the essay is about is sort of the way of thinking I have had for eight or 10 years, which is that that formula for success seems to be to act small but think big.

Mac Greer: And one company that comes to mind when I think big and when I think about a company that has really spread its wings in a lot of different places is Starbucks. Does Starbucks act small?

Seth Godin: I think Starbucks acts small in a whole bunch of ways. The people who are in a given Starbucks almost never quote company policy to you, and if someone walks in and wants a 120 latte, double milk, held low, they will make it for him. It's like it's the local place. The Starbucks near me and the people recognize the folks who come in and call them by name. That is not like McDonald's. So what Starbucks has done a masterful job of doing is even though they have thousands and thousands of outlets, they act like they only have a few.

Blowing in the wind ... of incompetence
Webster's defines competent as "having requisite or adequate ability or qualities." Seth Godin looks at competence in a somewhat different light.

Mac Greer: And another essay you wrote about that I really enjoyed was on competence and Bob Dylan.

Seth Godin: Well, you know, a lot of people want competence, and certainly people on Wall Street seem to, and competence being someone who they think is good at things. Unfortunately, competence is the enemy of greatness because people who are competent like being competent. They like doing a good enough job all the time.

Bob Dylan is serially incompetent. He got booed off the stage in the '60s. He got booed off the stage when he became a born-again Christian. He was ignored for years because he keeps taking risks, because he keeps doing things he is not good at and then getting good at them. When we look at corporations, which a Motley Fool person spends a lot of time doing, Wall Street keeps putting pressure on corporations to be average and then they're surprised when they hit the wall when, in fact, it's the corporations that have strong leaders who ignore Wall Street, the Apple Computers (Nasdaq: AAPL) of the world, the Googles (Nasdaq: GOOG) of the world -- those are the people who keep confounding expectations by overdelivering because they're willing to be incompetent.

Mac Greer: And along those lines, Seth, I have a friend who's seen Bob Dylan multiple times and said that sometimes he's been great and sometimes it's just been awful. I've only seen him once and he was great, but it sounds like there's a hit-and-miss quality to his performing.

Seth Godin: Oh, yeah, I took my son to see him and we left halfway through because it was horrible. (Laughter.) But the point is that human beings would rather have glimpses of genius than day-to-day mediocrity.

A super-sized suggestion for McDonald's
In his hit film Super Size Me, Morgan Spurlock pays the price for eating nothing but McDonald's for an entire month. The health effects are so severe that by the end of the second week, Spurlock's doctors are asking him to end his experiment. But Seth Godin says that McDonald's could benefit by promoting Spurlock's less-than-appetizing movie.

Mac Greer: And Seth, you offer up some unconventional advice to McDonald's, including the suggestion that they offer a free DVD of the award-winning Supersize Me documentary with every iced tea sold. Is that really a good idea? I saw that. It was not the most flattering portrayal of the McDonald's experience.

Seth Godin: Here are the questions I would ask to McDonald's. Do you think that people aren't going to figure this out if you just keep quiet about it? Do you think that by not mentioning the fact that it is the leading cause of death in the United States, that people aren't going to notice? It seems to me that McDonald's has tapped into something, which is that one out of seven Americans every day like going to a McDonald's, and people like certain kinds of flavor experiences, and they like them in a certain kind of setting. That's the business that McDonald's is in. McDonald's is not in the french fry business. McDonald's is not in the lard business or the saturated fat business. They're in the business of providing this place where people exchange money for an experience.

Well, if it turns out that the experience that they used to have was killing them, McDonald's shouldn't try to ignore it and hope we won't notice. They should be in front of it. They should say, "You know what we're going to do? We're going to stop using that ingredient." In New York City today, the mayor was able to pass a law that says it's going to be against the law for restaurants to use trans fats because trans fats are deadly. It's just as bad as smoking. Astonishing to me is that Burger King and some other fast-food places actually lobbied for the law not to get passed. Why? If the law gets passed and everyone is back on the same playing field and your customers live longer, which means that they can buy more stuff, I don't get it.

You can read more of Seth Godin's musings in his new book Small Is the New Big and 183 Other Riffs, Rants and Remarkable Business Ideas.

And you can read some of our previous "Ahead of the Curve" articles:

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Mac Greer does not own any of the stocks discussed. The Fool has an ironclad disclosure policy.