Every CEO knows their strategy will stop working. Few know when
A proper feedback loop ensures you are the first to know
Bad CEOs look at the rear-view mirror.
Good CEOs look at the horizon.
The best CEOs look at the ground under their feet—where the customers are.
Inside the Club today:
1. The ‘Brain in the Butt’—and why it’s failing your customer relations.
2. When there is a gap in the market but there is no market in the gap
3. How the Feedback loop can make your business move faster
4. CEO Uncomfortable Questions
A Brain in the Butt
Supersaurs—giant, plant-eating dinosaurs—were simply too big to react quickly.
Nerve impulses travel at about 8 meters (26 feet) per second. Since a Supersaur was a 40-meter (131-foot) behemoth, it took five long seconds for the “Hey, someone’s biting our tail!” signal to reach its command center. It took another second for its tiny brain to process the news, and five more seconds to send a command back down the spine to shake off the threat.
That’s eleven seconds. For a small, daring, and fast predator, it was enough to carve out a juicy steak and disappear before the giant even flinched.
But evolution supposedly found a fix. Supersaurs grew a second, “backup” brain in the butt. This primitive mini-brain had only one job: kick the intruder. Because it was right next to the pain, it could react in real-time.
The Supersaurs thrived—right up until the Chicxulub asteroid punched the planet in the gut. That impact was billions of times more powerful than an atomic bomb. It turned Earth into a pressure cooker for decades and wiped out the dinosaurs.
There is just one problem: that beautiful story about the second brain in the dinosaur’s butt is a total fake, though it was popular on the Net a few years ago.
But many large businesses are doing exactly that today. They grow secondary mini-brains instead of using their main ones to think and act strategically. They will likely meet the same fate as the Supersaurs.
The priority gap
Matt invited me to join his advisory board. He believed my strategic expertise might reveal why his company constantly underperforms.
‘We have a strategy,’ Matt told me. ‘We think it’s solid, by and large—but we have an execution problem.’
People often say this. What they don’t realize is that it sounds like: ‘We tried to look better than we are, but we ended up being ourselves again.’
We formed a small group—the CMO, VP of Sales, a few analysts, and me—to dive into the problem. I started the kick-off meeting with my favorite question: ‘Which Big Customer Problem are we solving here?’
When they struggled to answer, I followed up with another one: ‘Why did you choose this strategy in the first place?’
“We found the gap in the market,” the CMO replied.
You can imagine how the story unfolded. They spotted the gap and built a few products to fill it—but the products didn’t take off. They tasked customer support with helping users adopt the products and formed an agile team to refine them on the fly.
None of it seemed to help much. It worked just like the ‘brain in the butt’—fast, but ineffective in the long run. It solved the minor, short-term issues but never even sent a signal upstairs about the long-term ones.
The system was broken in a few very specific ways:
Feedback was purely passive. We only heard from customers when they bothered to call support themselves.
We only talked to those who had difficulties with the products.
The “silent majority” was a mystery. We weren’t liftng a finger to proactively study the customers who didn’t complain.
Non-customers didn’t exist to us. There was zero effort to understand the people who weren’t buying from us (yet).
“Did the CEO know about this?” I asked. “Yes—in general,” the VP of Sales replied. “He knows the problem exists, but it’s our job to fix it.”
Not quite.
If the customers aren’t the CEO’s priority, they are nobody’s priority.
The Feedback Loop
“We think in generalities, but we live in detail.”
Alfred North Whitehead, British philosopher
In traditional theories, strategy is like astronomy to a medieval villager. While the High Priests determine the movement of the stars, the ordinary people are busy digging in the mud. And these two groups never meet.
In such theories, CEOs rarely meet customers or truly understand how they live and work.
For instance, I once saw a LinkedIn post from Lufthansa featuring their CEO serving as a flight attendant in business class. It’s nice that he leaves his office occasionally. But it would be far more revealing for him if he flew economy class just once—and tried to make a tight connection in Frankfurt.
That’s why I called my concept the No Strategy Approach.
As you know, my Customer-Axis Framework—based on the approach—rests on two main pillars:
Creating a Customer. You start with a Big Customer Problem and create your own customers—Patrons—by delivering Unique Customer Value.
Growth Metabolism. You take Unique Customer Value and wrap your Assets, Processess, and Navigational Principles around it to make growth a continuous process.
But the heart of the system—the part that keeps it from falling apart—is the Feedback Loop. This is the direct channel that keeps the CEO connected to the reality of how the strategy is actually living and breathing.
At any given moment, the CEO must know whether the company is delivering customer value and solving the Big Customer Problem. And if it isn’t, the CEO must take action.
Most CEOs prefer to ‘manage by the numbers.’
But sales numbers have about as much to do with customer satisfaction as marriage does with paid affection. Just because you get paid doesn’t mean you’re loved.
Many CEOs believe that refining products, talking to customers, and gathering feedback is ‘someone else’s job’—usually sales or marketing. But the customer is your only source of revenue and growth. Because of this, a CEO cannot simply delegate every single interaction with them to someone else.
By doing this, you create a ‘brain in the butt.’ At first glance, it seems to speed up customer communication. But in the long run, it starves the main brain of the critical information it needs to make strategic decisions.
And it comes with a price. Nothing fuels a leader’s overconfidence like a lack of honest information from the field.
The Customer Happiness Squad
We formed a team I called the Customer Happiness Squad. I invited Matt to join. The CMO conducted additional research that only confirmed what everyone already knew: the strategy was dead.
The products built to ‘fill the gap’ weren’t bad. They just didn’t solve the Big Customer Problem. In fact, they didn’t solve any problem at all.
Winners aren’t those who don’t make mistakes, but those who admit them early and fix them. To Matt’s credit, he agreed that he missed the point.
At Matt’s invitation, and in my role as a board member, I’ve taken charge of building a feedback system—one designed to ensure the CEO is never left in the shadows.
This week, paid subscribers to this newsletter and founding members will receive an exclusive deep dive about Feedback Loops. I’ll be sharing success stories of building these kinds of loops in various businesses, including Zara (Inditex).
You can upgrade to a paid subscription to access this and much more: my latest book, upcoming mini-books (arriving this spring), access to our private WhatsApp group, and deep-dive insights for every article. Founding members also get personal mini-consultations to tackle their specific challenges.
If you’re not ready to upgrade yet, you can still build your own feedback system. Just make sure it answers these four questions:
Do you know—in granular detail—what your target customers actually need?
Are you certain your company is actually delivering value to them?
Does the value you see in your product match the value the customer sees? (They are rarely the same thing).
Are you and your top executives informed—in real-time—about shifts in customer perception or new alternatives hitting the market?
If you suspect your feedback loop is more of a ‘brain in the butt’ than a strategic tool—hit reply. Let’s figure out where the connection is broken.
CEO uncomfortable questions
1. Do you truly know what your customers’ lives look like?
2. Do you always keep in mind that they are the only source of revenue for your business?
3. Besides the marketing team, does anyone in your company have a clue what’s going on in your customers’ heads?
4. How many hours a week do you personally spend studying what your customers actually need?
Conclusion
Strategy is an intention. No matter how deep you elaborate it, it’s nothing more than a set of hypotheses. A feedback loop allows you to test these hypotheses fast—killing the ones that fail and doubling down on the ones that work. Don’t grudge the time or effort it takes to build a “CEO-to-Customer” feedback system. It’s an investment that pays off—and fast.
Next week, we’ll dive into Navigational Principles. Stay tuned.
Little Ones
We are quick to condemn snake oil salesmen, forgetting they wouldn’t exist without snake oil buyers.
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Strategic goals are for those desperate to stop choosing. But success is reserved for those who embrace the burden of constant choice.
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Starting strategy with an ambitious goal is like trying to paint a customer’s portrait while staring at your own reflection in the mirror.
Strategy is just hypotheses until you test them with real feedback, but most companies treat it like gospel handed down from on high.
"In traditional theories, strategy is like astronomy to a medieval villager. While the High Priests determine the movement of the stars, the ordinary people are busy digging in the mud."
Great description Svyatoslav!