Grow Your Business by Changing Habits

In his classic, Talks to Teachers, William James observed that "All our life, so far as it has definite form, is but a mass of habits." Essentially, from the time we wake up to the time we go to sleep, most of our daily activities are repetitive, unconscious habits. We brush our teeth, eat breakfast, go to gym and do things which, on closer examination, happen without much will and reason. They're just habits. A daily mass of these habits, over time, provides a behavioral map, which helps predict most individuals' actions. Corporations are no different. Organizational culture is an amalgam of habits. And depending on the dominant habits, firms will either fail or succeed.

According to biologists, the brain's cerebral cortex is the data processor upon which our habits are wired. Understanding the electro-chemistry and the relationship of the cortex with human behavior opens opportunities for companies to target customers effectively. If companies can make us create habits that involve their products, they'll be successful, as their revenue will grow via patronage. But they may not need to create a new habit; they can simply infuse their products into our existing routines.

Take Facebook and Twitter, for example. They're designed not just to nurture our social habits of connecting with others, but also to create a new habit of hyper-expression. New research from the University of Chicago says that texting and checking Twitter and Facebook come in just below sex and sleep on impossible-to-resist urges. These social media companies will succeed provided that they maintain the elements that sustain the habits. Why? Because habits change with acculturation, age, influence and other factors. Over time, we drop some, and pick up new ones. And companies need to keep pace with that. What's more, to remain successful, they need to play a role in creating or disrupting people's habits and aligning them with organizational products or services. In other words, as Alan Kay noted, "the best way to predict the future is to create it."

The future is full of habits, and corporations will succeed if their products or services are central to maintaining those habits. And companies can't just focus on meeting the needs and expectations of customers; they have to serve their perceptions — things the customers don't even know they need until they see them. The iPhone is the often-cited example of this — we didn't even know we needed it, but when the world saw the iPhone, we embraced it. These categories of products don't rely on focus groups because only visionaries can truly imagine their usefulness — they create entirely new habits and disrupt markets.

Becoming successful by changing the habits of customers is at the core of many successful brands. In his book, The Power of Habit, Charles Duhigg explains how Claude Hopkins, the genius behind Pepsodent, achieved success a century ago by convincing people to brush every morning. Brushing every morning means buying more Pepsodent.

The process of reshaping consumer habits doesn't necessarily have to be rapid or disruptive to customers. And not every market segment needs to be invaded at the same time: iPhones and digital cameras certainly didn't work for every market segment right out of the gate. But over time, they diffused and eventually transformed their sectors.

B2B companies that focus on enterprise solutions are no different. To succeed, they need to focus on creating new corporate habits, or on nurturing an existing habit, at the very least. For example, the business model of enterprise video conferencing hinges on the idea that companies will move from physical meetings to virtual ones. If companies like Cisco and Vidyo cannot succeed in reshaping organizational habits in this way, it's not likely they can grow the sector.

In this realignment of habits lies innovation. Firms who discover a niche way to change habits — and who make their own products an essential element of the new habit — are the ones who will survive and grow.

What habit is your own business reshaping?