Three Moments of Truth

In 1986 Jan Carlzon, the former President of Scandinavian Airlines, wrote a book titled Moments of Truth.  The core principle presented in the book was that every decision is a process.  A process made up of many moments where your product must be judged as a better option than the competition.  But, Jan also noted that not all moments are created equal.  There are a few moments you absolutely need to win or your product will be eliminated from consideration.  These are the moments you must identify and focus on winning.

While I was at P&G, A.G. Lafley applied Jan’s model with great success.  A.G. concentrated the P&G Marketing Organization’s focus on winning two mission critical Moments of Truth.  A.G. defined the First Moment of Truth as the moment when the consumer is looking at the store shelf and trying to decide which product to purchase.  He concluded the Second Moment of Truth occurred when the product was used at home.  By simplifying a highly complex decision process, and focusing our attention on winning the most critical moments of the consumer purchase decision, A.G. was able to lead P&G into a period of accelerated business growth.

I find a lot of similarities between my experience at P&G and the challenges we face in economic development.  The capital investment decision is certainly no less complex than the consumer purchase decision.  In fact, you might argue it is even more complex.  To help me better understand and simplify the decision process for my own use, I turned to the lessons I learned from A.G., and developed the Three Moments of Truth Model. This model is designed to help you assess the sufficiency of your community’s marketing planning and to drive the kind of operational focus that will transform your economic development organization’s ability to attract capital the same way it did for P&G’s ability to deliver enhanced shareholder value.

There has never been a more urgent need for a model like this.  Limited budgets are making it very difficult to create promotional plans sufficient to achieve place branding objectives. In economic development, communication plans are typically under funded and, as a consequence, unable to achieve adequate reach and frequency to deliver the desired message.  This is particularly problematic when you consider global competition for capital investment in increasing.  Every day we are competing more and more often with other countries rather than other states.  And, it isn’t likely we will get relief from the budget pressure any time soon.  Most states are facing significant budget gaps.  The national projected 2012 state budget gap is a mind blowing $125B. That means we absolutely must find a way to ensure the investments we do make with our limited promotional budget are highly focused so we have a fighting chance.

The Three Moments of Truth Model can help you ensure the right level of simplicity and tactical focus for your communication plans.  The challenge will be making time to understand and leverage the Model.

If you are a Stephen Covey fan, you’ll recall that in his book The Seven Habits of Highly Successful People, he calls this Quadrant II work – Important but Not Urgent.  It is the kind of work Stephen argues you simply must make time for if you want to succeed.

Let’s take a look at the Three Moments of Truth Model.


Moments of Truth image

THE FIRST MOMENT OF TRUTH – Winning the Opportunity to Compete

This Moment is all about managing your community’s image.  A 2008 national study by DCI suggests that 71% of the time a short list of location options for due diligence is created without the Company speaking to an economic development professional.  That means 71% of the time your community’s image will be the difference between being on or off the list. Your on-line presence can have a significant effect on your image. If you lose this moment, your community doesn’t even have a chance to put a proposal forward for consideration. As Phil Keoghan, host of The Amazing Race, a popular television show, would say “I am sorry to tell you, but you’ve been eliminated from the race.”

THE SECOND MOMENT OF TRUTH – Winning the Competition

This Moment is all about listening to the capital investor’s real needs and creating both a positive experience and compelling proposal that meets/exceeds those needs.  It is important to think out of the box and not view winning this Moment as simply putting the biggest incentive package on the table.  Capital investors will gravitate to the proposal that delivers the best value.   It is important to appreciate that the capital investor, not you, defines value.  That is why it is so important to listen carefully.  The more you learn about what is really driving the decision on each project, the better prepared you’ll be to offer something the competition will not be able to trump.

THE THIRD MOMENT OF TRUTH – Winning the Repeat Investment

This Moment is all about proactively managing your community’s identity.  It is important to appreciate the difference between image and identity.  Your image is how your target audience perceives your location.  Your identity is what your community actually is.  Identity includes assets, infrastructure, business climate and culture.  The key to consistently winning the Third Moment of Truth is to have a plan that ensures your community promise remains relevant, competitive and authentic.  Doing so will help you exceed the expectations of executives in your community and over time build loyalty that reduces the risk of company relocation and job losses.


To apply the model, create a table with three columns (one for each moment).  Take your tactical plan and assign each tactic to one of the columns.  If you believe a given tactic affects multiple moments, then proportionate it across the columns assigning X% to one moment and Y% to another.  When you have completed the table, take a look at the aggregate amount of investment you are making for each moment and ask yourself if it is sufficient to give you confidence that your community will win more often than lose.  If you are not confident your community is investing enough to win, then you will need to start thinking out of the box to find ways to bring more effort to bear on winning each moment.

Every time I have completed this exercise, I have been amazed by the results and the clarity it brings to what is required to win.  I have confidence it will do the same for you.


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