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This chapter is from the book

Distorted Maps

Many successful maps have distortions in them that eventually emerge and lead the followers of the map from success to failure. Distorted maps have a tendency to exaggerate some elements of the terrain while diminishing others. This typically reflects the psychological process—found even in cartography—of inflating what you know and deflating what you do not. From a mental map perspective, the extreme state is one in which you believe that what you know is everything and what you do not know is nothing.

How do distorted maps look in actual cartography? Consider the map in Exhibit 2-3.

EXHIBIT 2-3EXHIBIT 2-3 A Bostonian's view of the United States.

This is how the United States looks to someone from Boston. As you can see, Cape Cod is of significant size and substance in the Bostonian's mind. On the other hand, although Florida exists, it is quite small in comparison. Likewise, the Northeast in particular and the East in general are much larger than the humble (but no longer an island) California.

Just in case we have any Bostonian readers who are not quite sure what is wrong with this picture, we have also added a map that more accurately portrays the relative dimensions and sizes of the places in question in Exhibit 2-4.

EXHIBIT 2-4EXHIBIT 2-4 A more accurate view of the United States.

As a point of interest, this type of distortion is common to us all. Asked to draw a map of their neighborhood, people invariably draw their street and house much larger than they are in proportion to the overall neighborhood that they map out.

Although this type of mistaken map is intriguing, the key question is, How does it apply to the business world? The first important implication is that, although a distorted map may be mistaken, it works as long as one does not venture outside of the known area. The distorted map of the United States is not a problem and works well—as long as you stay in New England. Venture off to Florida and use this map to calculate driving time, and the results will not be positive.

The second important implication is that the distorted map leads you to stay within the exaggerated area. Why would you want to leave Boston or New England? After all, based on the map, it looks as though there really is not much else out there. Consequently, using this mistaken map would quite likely cause you to stay "at home." Ironically, staying at home increases the map's success. The more you use it to get around at home, the more successful experiences you will have, and the more convinced you will be that you should hang on to this map. Following the distorted map actually keeps you from encountering evidence of the map's inaccuracies and mistakes!

It is relatively easy to find business examples of these same dynamics that result from relying on a mistaken, distorted map. One of the more interesting examples is the Kellogg's company. Located in Battle Creek, Michigan, Kellogg's has dominated the breakfast table of Americans (especially children) for decades. Kellogg's had a mental map of the world that exaggerated what it knew (breakfast cereal in the United States) and deflated what it did not know (other food products for the rest of the world). As a consequence, Kellogg's view of its existing and new products, as well as existing and new markets, looked like Exhibit 2-5.

EXHIBIT 2-5EXHIBIT 2-5 Kellogg's world map of products and markets.

Just as a Bostonian's exaggerated view of the size of Cape Cod, Kellogg's greatly inflated the size of breakfast cereal in the United States, compared with the rest of the picture. For nearly 40 years, this strategic map worked just fine at Kellogg's. As a matter of fact, given how small the rest of the world seemed, based on this map, why should Kellogg's venture far from home, in terms of either products or markets? The prize looked just too small to worry about. So it didn't; it stayed at home within the safe boundaries of its map.

What happens, though, when the home market begins to shift? What happens when people eat breakfast less at the table and more on the run? What happens if generic makers of cereal increase their quality until they begin to rival Kellogg's but offer prices that are 20–30% below Kellogg's? What do you do if you're an executive at Kellogg's? At first, you deny. It is just a temporary blip, and if it is more than temporary, it is confined to a small segment of the market.

What do you do when you see sales start to flag and flatten, and you simply cannot deny the shifts? What do you do when you can deny the shift no longer? You do what you know how to do. You increase trade promotions (i.e., money for retailers to push your product). This is exactly what Kellogg's did, but unfortunately, it did not increase sales much, and it actually hurt the company's earnings.

Based on this distorted mental map of the world, would you explore new products? Look at how small that space is. The answer is that you wouldn't, and Kellogg's didn't. The company did not introduce a single new brand between 1983 and 1991. Even though it successfully introduced Pop-Tarts in 1964, it did not introduce a single new snack-food success until 27 years later, when it launched Nutri-Grain cereal bars.

What about new markets? With this distorted mental map, would you aggressively explore new markets? Again, look at how small that space is. In talking with executives at Kellogg's, several pointed out that they were "into" international markets in a big way during the 1980s and 1990s. The company was operating in roughly 30 different countries. But if you measured revenues and profits and not just countries in which Kellogg's operated, the strategic, financial, and marketing emphases were completely in harmony with the distorted mental map. The vast majority of efforts and returns were focused on the home market. From this case example of Kellogg's, let's review several key points.

First, just because a map works does not mean that it accurately reflects all the terrain. Breakfast cereal in the United States was not nearly as large as it seemed to Kellogg's executives in the context of the global breakfast-food territory.

Second, as long as the terrain in focus doesn't change and you don't venture outside the exaggerated area of focus, the map (mistaken as it may be) continues to work fairly well. The longer it works, the more convinced you become that it is, indeed, correct.

Third, even when signs start to emerge that the map is not working as well today as in the past, its distorted nature creates a logical incentive to stay at home. After all, if the noncereal and non-U.S. parts of the map are as small as they appear, they are not really worth venturing into.

Fourth, even as evidence starts to mount that the terrain has shifted and the map is just plain wrong, there are great pressures to respond to shifts by doing what you know how to do—rather than venturing into unknown territories or paths. Like Kellogg's, you flood the market with sales promotions, rather than make serious attempts to launch new products or conquer new lands.

Until Kellogg's changed its strategic map maker (new CEO, Carlos Gutierrez), no threat or opportunity was seen because Kellogg's was so blinded by the light of what it already saw. Later in the book, we will continue the Kellogg's story and show how it has tried to change the strategic map in executives' heads to grow the company.

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