Parts of the following has been taken from Compete Smarter, Not Harder, John Wiley & Sons, Dr. William Putsis, release date November 4, 2013.
“The art of the wise is knowing what to overlook …”
William Blake
I know you recognize the following story. The names and situation may be different, but the story is the same, for it plays out all the time inside of companies around the globe:
Scene: A conference room with managers sitting around an oval conference table.
Issue: Deciding on future strategic direction and customer base.
Manager 1: We have a great offering and it would fit perfectly with segment X, where market is growing with off the charts growth rates.
Manager 2: No, we need to go after market Y, the margins with this group are incredible.
Manager 3: You’re both wrong, we can’t alienate our core – the largest market by far is X and our focus should be here, with the largest market.
Manager 4: Our budget allocation for next year is constrained – how are we going to fund this expansion. Perhaps we should reorganize?
We’ve all lived these conversations. Who wins? Usually the one who has the highest position on the org chart, the one who controls the budget or the person who talks the loudest. Who should win? The one that is right. Today more than ever, choices need to be made allocating scarce resources to decide on the right part of the market to compete, with the right tactics for the right segments. We need to decide not only where to compete, but where not to compete. We need to work smarter, not harder.
To illustrate …
Back when Tesla and Edison were warring with each other to determine if AC or DC would win out to become the dominant form of electricity, John D. Rockefeller was desperately trying to stop electricity from ever becoming mainstream. The reason? Widespread use of electricity had the potential to destroy Rockefeller’s Standard Oil’s stranglehold on the kerosene market, as it ultimately did.
It didn’t matter how efficient or dominant Standard Oil was in kerosene – or how well Rockefeller competed in the kerosene market. It was just a matter of time before electricity would eliminate the need for kerosene to light homes.
We often do similar things in business today – compete hard and often quite well in markets, only for these efforts to be in vain. If another firm owns a key strategic control point, or has a significant advantage in key customer segments or is competing in a higher margin part of the market, it may not matter how hard you compete, just like it didn’t matter how hard Rockefeller tried to stop electricity from lighting homes.
Compete Smarter, Not Harder is about deciding – at every step of the way – where to compete and with what priorities. Knowing which part of the market, which market to compete in is often much more important than how hard or how well you compete.
Compete Smarter, Not Harder.
Unlike Rockefeller, never fight with change because the most consistent thing in the world is change. Be flexible to know when your business and Idea is obsolete and never protect an idea as your own, only protect result.
Couldn’t agree more, well said and spot on!
That is a very easy observation to make when we are over a century from the issue and we have no money in the argument. Rockefeller was watching his entire life’s work being wiped out; I don’t think it was just about the money. I don’t think HE wanted to be considered obsolete. I think that’s an understandable impulse – even though he was wrong
Good point and great discussion item, thank you for posting! I agree that HE was concerned with being obsolete, but customers and the market will never care about what the owner of a company is concerned with (except perhaps for some mission driven organizations). That in many ways was the point of the post, that you have to resist the understandable impulse and focus on the needs of the customer always. If you don’t, you become Rockefeller trying to stop electricity, brick-and-mortar retailers trying to stop the tide of online retailers, Blockbuster trying to stop streaming, taxi medallion owners suing to try to stop Uber. Today, there are countless examples of Rockefeller’s understandable impulse being repeated with inevitable impending failure (e.g., companies trying to fight additive manufacturing, AI and IoT enabled production with old-line lean; large brick-and-mortar retailers continuing to be slow to adapt (read: Sears, Barnes & Noble); educational institutions resisting online; title companies resisting blockchain; the list almost endless and their future predictable). Writer and philosopher George Santayana famously once said, “Those who cannot remember the past are condemned to repeat it.” History repeats as we write!