Watts next?

Entrepreneur, April, 1997 by Robert McGarvey

Watts Wacker is a hot futurist - in heavy demand by a stream of clients including Dreamworks SKG, Gateway 2000 Inc. and Boston Chicken. They knock on his door at consulting firm SRI International, where he is formally tided "Resident Futurist" because he has had an uncanny series of spot-on predictions about tomorrow. He predicted the boom in garden supplies sales as well as Clinton's '96 election margin, and, nowadays, he sees change happening at an ever more furious pace.

How does he come up with his ideas? Wacker's methods are as unorthodox as his ideas. Although he spent a decade at Yankelovich Partners overseeing the polling company's trends surveys, Wacker's favorite technique for getting a take on tomorrow is to hang out in unexpected places. He's put in hours everywhere from a Taco Bell, where he bused tables, to panhandling in New York City's ghettos. The logic of this "observational research," as Wacker calls it? "A key to knowing the trends is to listen, really listen, especially to people with points of view that are different from ours," says Wacker, co-author of The 500 Year Delta: What Happens After What Comes Next (HarperBusiness).

Just as unorthodox is how Wacker thinks. The linear, number-crunched predictions of many pollsters aren't his style. Instead, his thoughts tumble out, and listeners have to scramble to keep pace with his accelerated train of thought. But read closely, because these days Wacker's telling his clients that there's just one essential key to succeeding, and that's to make promises ... and keep them.

"The great ideas are all basic - if you can practice them," says Wacker, who here elaborates on how to successfully keep corporate promises in the coming years.

Entrepreneur: You've said there are "no more virgin consumers." What does this mean?

Watts Wacker: Charles Barkley had a great quote during the Barcelona Olympics when the "Dream Team" was drubbing opponents by 60 points a game. That spawned lots of "Ugly American" articles. But Barkley said, "Wait a minute. We should be beating these teams by 60 points. Basketball is something we're good at."

My argument is that America is good at three things: basketball, making war and buying stuff. The key here is that consuming is no longer about tactical or strategic decisions. It's about psyche definition. We define ourselves as good or bad based upon our consumption skills. It's not whether you buy a Lexus; it's how much you paid for it. In your peer group, if you paid too much for a Lexus, you're subject to ridicule. And the companies that are fastest to embrace everyday low pricing and put their brands back in sync with appropriate price levels are the ones that will succeed.

Entrepreneur: Are you telling merchants they have to compete on price?

Wacker: Consumers have realized that if they wait, the price will come to them. Except they don't wait on brands that deliver their promise. and the money will come to you. It's not about trying; it's about being. Like Starbucks. I pay more now for a cup of coffee than I do for a vodka martini. Starbucks delivers on its promise.

Entrepreneur: How does a company make a promise?

Wacker: A brand is a promise, and, in the end, you have to keep your promises. A product is the artifact of the truth of a promise. Coke promises refreshment; Gateway Computer promises to be your wagon master across the Silicon prairie. There is no difference between what you sell and what you believe.

Entrepreneur: Then there's Saturn, which promises not to dicker and doesn't offer discounts.

Wacker: If you have a promise - and work at keeping it - the price will take care of itself. The promise of Saturn is to respect you, which is why they can say it's a new kind of car company. I don't believe it's a new kind of car, but it is a new kind of car company. And Saturn gets better margins because it knows what it is.

Know the promise, and then figure out how to consistently deliver on it. If you have a problem with a Saturn, it's nothing more than another opportunity for Saturn to demonstrate that it delivers on its promise. There is no trick to any of this. It's say what you mean and do what you say.

Entrepreneur: We don't have to deliver 100 percent on a promise?

Wacker: Companies have been talking total quality but not realizing that you cannot offer 100 percent satisfaction guaranteed because that is an impossible promise to keep. The re-engineering gurus preached zero-defect management - the elimination of mistakes - at the same point in time their customers were expecting failures. And customers have been evaluating businesses not on whether you make mistakes but on how you handle them once they are made.

Entrepreneur: What can a small business do with your ideas?

Wacker: Your first step is to realize that you've got to write a 500-year plan. Forget five-year plans! If anything, a small business has a better opportunity for developing a 500-year plan than a big business does because it doesn't have all the bureaucratic levels. The 500-year plan is: What are you promising, what do you stand for? If you know that and you can keep your promise, you've cleared 70 percent of the hurdles to success.