When running a long race, there are many strategies that an individual can pursue. One can get out front and hope
to stay there as the fastest for the whole race. One can hold back and follow the leader until the finish line is
in sight, then sprint ahead at the end. This strategy works well if you are faster than the leader and he is
giving his all. If he, too, is holding back, his position in front gives him the advantage. A third strategy for
a long race is to just coast along hoping that everybody else takes a nap so you can pass them. It worked for the
tortoise, but are no reports of success since.
Business is a very long race. There is no finish line. If you’re in back of another company, you can’t wait to
sight the finish line and sprint. You have to find a way to get ahead, or you have to stay behind waiting for the
others to drop out of the race by filing bankruptcy or getting out of your market. That isn’t to say that you
can’t make money from behind the leader. In fact, you can even make money from the rear of the pack. But it
entails different strategies and different profit margins.
Michael Treacy and Fred Wiersema in their book The Discipline of Market Leaders speculated that there are three
successful business strategies:
- Operational Excellence,
- Product Leaders, and
- Customer Intimacy.
Summarizing their ideas of market disciplines, they are saying that you’d better be cheap, first, or you’d better
know someone. The book Selling the Wheel by Jeff Cox and Howard Stevens took a look more at sales than marketing
and came to similar conclusions, but they threw in the product life cycle, and they related the different types of
sales to where the product was in the life cycle.
So, if you can make money by pursuing different strategies at different times in the product life cycle, do you
have a choice of which strategy you pursue? Or do you just follow the life cycle and adjust to it? The truth is
that you can always set your own direction. If you are an innovative company, you can sell or license
manufacturing and distribution of a product to a company specializing in operational excellence when that product
gets beyond your comfort level of obsolescence. As a businessperson, you can set sail for the depths of unknown
territory on the maps, or you can follow along never losing sight of the known shore. It’s your choice.
The real question is, are you acting or reacting? Are you the one setting the strategy that other companies have
to react to? Have you made your decisions consciously? Do they fit with how your company works and with your
expertise, or are you just doing it because your competitor did? When your company is cutting costs and laying
people off, is it because you are reacting? Or is it that you are acting so you never have a crunch? Like
pursuing your own strategies, the choice of acting or reacting is one that anyone can make.
“But, F. B.,” you say, “I don’t have the power to change the market or I don’t have the money needed to innovate.
How can I take control of my destiny?”
The first step in the process is self-examination. Where are you now? Where would you like to be? Is it
reasonable to believe that you can get to where you want to be? What happens if you try to get there and fail?
Are there ways you can minimize the risks of trying? What has to change to make you more in control?
There is a small business owner who decided he didn’t like his clientele very much. He was a consultant to large
businesses. He often wound up on projects that would last forever with no progress. The customer would re-open
questions that had been decided the year before. He decided that rather than continuing to face the corporate
giants, he would rather work on much smaller projects with small companies. He knew that small businesses made
decisions faster.
This consultant had a new brochure made up. He re-wrote his other marketing materials. He joined organizations to
get out and meet the small business owners. In a short time, he had a new market and a new service set. It took
him time to recover from the change because he didn’t do anything to insulate his company from the shock. But the
point is that he took charge of his destiny and hasn’t had cause to regret it.
How are you taking charge of your destiny?
F. B. Knight is Curmudgeon-in-Residence at the Attila the Hun School of Management. He can be reached for questions
at
fbk@attilathehunschool.net.
