I haven’t seen this many moats since the last season of Game of Thrones. The word ‘moat’ is the latest buzzword in Silicon Valley and it’s appearing more often in the business pages. The trend is not as odd as it might appear.
According to one analysis, tech company executives have used the word “moat” 89 times in earnings calls and financial presentations over the past year. The trend appears to be tied back to Warren Buffett’s choice of the metaphor as a stock picking analogy. Buffett said he looks for companies that have a strong protection against competitors, “like an economic castle.”
Medieval analogies have enjoyed a resurgence since the HBO documentary, Becoming Warren Buffett. In the program Buffett adds another analogy, comparing an effective CEO to a protector: “In capitalism, people are going to try to take that castle from you so you want a moat around it and you want a knight in that castle who is pretty darn good at warding off marauders.”
Analogies aren’t surprising; they’re expected. The more abstract a concept the more likely it is you’ll hear an analogy to explain it. In the broadest sense, an analogy compares two distinct things to show their similarities. Analogies appear in many forms (metaphors, similes, slogans) and they fill our daily content. Here are just a few of the analogies in this weekend’s edition of The Wall Street Journal:
-States are ‘tapped out’ of taxing the rich. One political leader said his state cannot “go back to the well again.”
-The late economist Allan Meltzer was said to be the “chief scourge” of the Fed, while Henri Termeer is remembered as a biotech “pioneer.”
-Saudi Arabia is looking to “cement ties” with the U.S., while a political crisis “grips” Brazil.
-The stock market had an active week. Stocks were ‘shaken’, ‘jolted’ and ‘rattled.’
-The Pulitzer prize-winning writer (and former Reagan speechwriter) Peggy Noonan, wrote, “The world sees the U.S. political system once again as a circus. Once the circus comes to town, it consumes everything, absorbs all energy.”
Journalists and business leaders love analogies because they need to describe abstract and complex topics in a brief time or space. Linguists and cognitive scientists say our brains are wired for analogy. We think in analogy, we process our world in analogy, and we like to communicate in analogy. An analogy is the best tool we have to share ideas.
You can have a lot of fun using analogies in business presentations. I consulted with senior executives for Intel upon their launch of the first ‘dual-core’ computer chips. The challenge was to explain two processor cores on a single chip to the average consumer. We used an analogy (a simile, actually, which is a type of analogy using the word ‘like’ or ‘as’). Since the microprocessor is like the brain of a computer, a dual-core chip was like having two brains in laptop — one brain can handle one function while the other brain is doing something else. We explained how it made your computer faster and what it meant for the average user. Media and bloggers ran with it, often using the exact analogy to describe the product when they couldn’t think of a better one. According to Reuters, “Duel-core processors have two brains instead of one.” Exactly.
My experience with Intel taught me that simple words and analogies must be used to help consumers translate the language of science, math and engineering.
The problem with analogy is that it requires brainstorming to come up with an appropriate one. Once people find a good one, they tend to use it over and over, and over and over. Pretty soon we’ve heard the same analogy so often it becomes a cliché and loses its power. Investors will soon grow tired of hearing “moat.” A new analogy or metaphor will have to take its place — and one surely will.
The lesson for leaders, educators, scientists and communicators in any field is to use analogies to explain complex topics or abstractions. The key is to find unique analogies that will surprise your audience and force them to think differently about a topic.