Henry Hazlitt’s book “Economics in One Lesson” holds the key to a brand's survival and success. It can be summarised in one powerful statement.

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

It's as relevant today as it was back in 1946 when the book was first published. It's based on Frédéric Bastiat's essay "Ce qu'on voit et ce qu'on ne voit pas". The English translation is "What We See and What We Don't See".

Ce qu'on voit et ce qu'on ne voit pas

It's the parable of the broken window fallacy that shows how one opportunity (e.g. cost efficiency, product launch, manufacturing, marketing, brand positioning, et cetera), when traced to the law of unintended consequences, delivers a powerful hold on a brand's full performance in ways that are unseen or ignored.

It is believed that a boost to one part of a brand, in isolation, benefits the whole brand. But this is shown to be false. These unseen losses to the other groups are the broken window fallacy.

Unfortunately, nine-tenths of brand fallacies slowly, inadvertently and unseeingly increase a brand's growth impairment. The cause can be traced to the direct result of ignoring Henry Hazlitt's one lesson. If the exercise is applied, it traces any economic act or policy to that brand's unforeseen and adverse ripple effects. It presents a brand's economic dogmas as a series of layered fallacies.

An active example of a brand's €874 million paradox of success is outlined below.

The Paradox of Success

A client of mine beat a policy to double its operating (product category production and transportation) efficiency metric (+10%)—a stunning success for that group. That team's success earned them a merited bonus.

But a year trading with this enhanced policy, in 2020 and with a diagnostic, the client and I traced and found that that one (1) policy had inadvertently lost €874 million in annual group retail sales (-3% YoY). It marked a deterioration in brand customer satisfaction.

The Brand Officer had initially asked for a draft on why 33% of their markets were underperforming (beyond the current pandemic impact). We pinpointed one of the several keys that controlled customer performance.

The result unsettled the brand's executive team.

Experience shows all brands maintain and sustain strong dogmatic fallacies. My advice is, don't let those be the guide to your brand's survival.