There is no secret sauce

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There is no secret sauce

Garden fresh tomatoes If there’s one expression I’ve heard over the years that demonstrates an executive’s lack of understanding about how business works, it’s the idea of secret sauce, the concept that your company has some secret methodology or recipe that makes you incredibly successful and powerful. Everyone’s questing for this sauce. What’s the right mix? What are the ingredients? The truly paranoid obsess over the theoretical secret sauce of other companies.

There is no secret sauce.

None. The recipe for Coca Cola was derived using gas chromatography decades ago. The Colonel’s 11 herbs and spices have largely proven to be a myth, again thanks to food laboratories. Go read William Poundstone’s Big Secrets if you want the actual recipes.

Your business doesn’t have a secret sauce, either. Unless you’ve got a product that absolutely no one else has, your “secret sauce” is probably in use in some form or fashion at every one of your competitors. The only exception to this might be if you’re deeply incompetent, in which case there are probably ingredients in your sauce that no one wants.

In the grand scheme of things, how much does the secret sauce matter? Let’s take it literally:

If your restaurant is open for business only on Tuesday nights from 1 AM to 2 AM, your secret sauce won’t save you.
If your servers are surly and abusive to your patrons, your secret sauce won’t save you.
If the food that the sauce is placed on is substandard or infected, your secret sauce won’t save you.
If your financial management makes the entire restaurant a failed investment, your secret sauce won’t save you.

The secret sauce matters much less than having staff that can serve patrons well, having the restaurant open when people want to eat, having a chef that can cook competently, having prices that patrons are willing to pay, and having a product of good quality.

The reality is that if you or your management team are obsessing over a secret sauce, you’re basically asking for a magic wand to fix problems in your business that you’re in denial about. If you’re obsessed over your sauce and someone else’s sauce, you’re probably going out of business soon.

Stop obsessing over secret sauces and start making sure your business is performing the basics well. You’ll sleep better at night, your business will run better, and who knows? With all that stress relieved, you might feel creative enough in the kitchen to one day invent a new, secret sauce.

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Comments

13 responses to “There is no secret sauce”

June 1, 2010

Saul Colt

Hey Chris,

Long time reader, first time commenter, Big fan.

I disagree with your assertion of “There is no secret sauce”. Sure there is no secret methodology that will make you successful but there are things you can do as a company to differentiate yourself from your competition to make yourself more appealing to customers.

Companies like Zappos and FreshBooks clearly use customer service and happiness as their secret sauce because both are in positions with a lot of competition and a replicate-able product offering. The thing that can't be replicated is the way they treat people outside of their product. There may not be a product centric sauce to sprinkle on every product but I believe there certainly is something special to be done outside of product.

You could even make a case that the Financial Aid Podcast was the sauce/value add/differentiator that drew people to the product you were offering.

saul!

Reply
June 1, 2010

Christopher S. Penn

I think we're saying the same thing, and it's an important thing. The sauce is less important than how you serve it.

Reply
June 1, 2010

Christopher S. Penn

I think we're saying the same thing, and it's an important thing. The sauce is less important than how you serve it.

Reply
June 1, 2010

Greg de Lima

Chris,
Good ideas, on a bit of a side-note where you say “If your servers are surly and abusive to your patrons, your secret sauce won’t save you.” Actually there IS a restaurant where this is why the patrons come in, but I can't remember the name; I digress.
You're right, and no one strategy will ever be the same for one business to the other. A consultant can not come on and say, this worked for me over at X company so it HAS to work here, no.
The secret sauce will always be a combination of every company's strong points and bringing them together to change the way a company works for a focus on its clients.

Reply
June 1, 2010

Saul Colt

Hey Chris,

Long time reader, first time commenter, Big fan.

I disagree with your assertion of “There is no secret sauce”. Sure there is no secret methodology that will make you successful but there are things you can do as a company to differentiate yourself from your competition to make yourself more appealing to customers.

Companies like Zappos and FreshBooks clearly use customer service and happiness as their secret sauce because both are in positions with a lot of competition and a replicate-able product offering. The thing that can't be replicated is the way they treat people outside of their product. There may not be a product centric sauce to sprinkle on every product but I believe there certainly is something special to be done outside of product.

You could even make a case that the Financial Aid Podcast was the sauce/value add/differentiator that drew people to the product you were offering.

saul!

Reply
June 1, 2010

Christopher S. Penn

I think we're saying the same thing, and it's an important thing. The sauce is less important than how you serve it.

Reply
June 1, 2010

gregdelima

Chris,
Good ideas, on a bit of a side-note where you say “If your servers are surly and abusive to your patrons, your secret sauce won’t save you.” Actually there IS a restaurant where this is why the patrons come in, but I can't remember the name; I digress.
You're right, and no one strategy will ever be the same for one business to the other. A consultant can not come on and say, this worked for me over at X company so it HAS to work here, no.
The secret sauce will always be a combination of every company's strong points and bringing them together to change the way a company works for a focus on its clients.

Reply
June 1, 2010

Mark 'Rizzn' Hopkins

Those are easy examples to point to.

How about how Goldman Sachs was able to recover their mutual/hedge funds so quickly after being at the brink of economic collapse. Certainly a multi-billion dollar infusion will do wonders, but certainly there's other aspects to it, right?

Turns out there is. Their secret sauce is superior algorithms (interestingly, the same secret sauce that made Google the dominant search engine for over a decade). Goldman Sachs was able rapidly recover money in part due to high frequency trading, something all the big firms do, but something GS is proving better at than others.

(http://hplusmagazine.com/articles/ai/singularit…)

And the thing is, what makes those sauces tick are _definitely_ secret. The tech and science sectors are rife with examples of folks coming up with secret ways, but it's not limited to that – Walmart had an advantage over other retail chains for a good part of a decade due to their superiour logistics, a secret sauce they rode all the way to being the world's biggest employer. The world of logistics planning eventually caught up to them, but they had a very strong lead.

To say there's no such thing as a secret sauce is a failure of imagination.

Reply
June 2, 2010

Remains of the Day – Social Secrets | Ian M Rountree

[…] There Is No Secret Sauce – Christopher S Penn I love Penn’s writing style – his analytical approach marries well with the no-nonsense information he passes on. Lesson here? There is no one secret, nothing that will allow you to skip doing your work thoroughly and well. […]

Reply
June 2, 2010

Mark 'Rizzn' Hopkins

Those are easy examples to point to.

How about how Goldman Sachs was able to recover their mutual/hedge funds so quickly after being at the brink of economic collapse. Certainly a multi-billion dollar infusion will do wonders, but certainly there's other aspects to it, right?

Turns out there is. Their secret sauce is superior algorithms (interestingly, the same secret sauce that made Google the dominant search engine for over a decade). Goldman Sachs was able rapidly recover money in part due to high frequency trading, something all the big firms do, but something GS is proving better at than others.

(http://hplusmagazine.com/articles/ai/singularit…)

And the thing is, what makes those sauces tick are _definitely_ secret. The tech and science sectors are rife with examples of folks coming up with secret ways, but it's not limited to that – Walmart had an advantage over other retail chains for a good part of a decade due to their superiour logistics, a secret sauce they rode all the way to being the world's biggest employer. The world of logistics planning eventually caught up to them, but they had a very strong lead.

To say there's no such thing as a secret sauce is a failure of imagination.

Reply
June 2, 2010

patgrahamblock

I agree! Good old-fashioned service, whereby the customer has a fantastic “tell everyone experience” will go along way!

Reply
June 2, 2010

Pat Graham-Block

I agree! Good old-fashioned service, whereby the customer has a fantastic “tell everyone experience” will go along way!

Reply
June 2, 2010

Pat Graham-Block

I agree! Good old-fashioned service, whereby the customer has a fantastic “tell everyone experience” will go along way!

Reply