Never Delegate Understanding

In 1978, an artist named Patricia quit her job at a small-town newspaper out of frustration. She wanted more freedom in her career and to be her own boss. She excitedly went home to tell her husband Mel of her decision only to find out that he too had quit his job that day for similar reasons. Together, out of work and craving an entrepreneurial experience, they decided to start a clothing company. With $1500 they bought “seconds” and “irregular” shirts from importers and sold them at the local flea market. Through hundreds of hours of talking with consumers and observing what sold, Patricia and Mel adjusted their stock; more shorts, less pants, more shirts, less hats, etc. They rented a storefront for dirt cheap (there was no way to lock it!) and they used old fruit crates to display their wares. When it came time to name their business they looked around at the crates lining their walls and called it Banana Republic.

Patricia and Mel’s store was purchased by Gap in 1983 and they continued to run it for five years after the acquisition. During their tenure, Banana Republic became one of the most successful apparel retailers in the world, with more revenue per square foot of retail space than any other retailer in the United States – double the national average.

However that didn't last. As Gap started to replace the original BR management team with competitor’s sales executives, marketing models and superstar designers, the focus of the brand drifted. Throughout the Great Recession, BR saw sales dwindle as analysts reported that they were a store "with nothing to say." In June 2018, Gap announced  they would be closing over 200 Banana Republic stores due to soft sales.

Can a company live on after a founder exits? Absolutely. Can you hire new management and instill new ideas in an old brand? Of course. However, if you want to be successful there is one thing you can't do: You can’t delegate understanding. You can’t speed up the process of digging in and learning the ins-and-outs of how your consumer and your market works or how it is changing.

So many companies have made this mistake.  When we buy a tool, a system or a model and expect it to fix your problems, you’re delegating understanding. When you design a strategy by sitting in a boardroom and not a consumer’s living room and expect others to implement it, you’re delegating understanding. When you ignore experiments, iteration and learning and launch something because you like it (or your husband/sister/child likes it)--you’re delegating understanding.  

To design better products and make better brands there are no shortcuts. You have to start by accepting that you must invest personal time in understanding the problem before you can truly find a path to success.