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September 13, 2004

Excerpts: Everything You Need to Know About Strategy - Part IX

By: Dylan Schleicher @ 1:15 PM – Filed under: Management & Workplace Culture

7. Do you subscribe to Jerry Garcias dictum: We do not merely want to be the best of the best, we want to be the only ones who do what we do?
Doug Hall, P&G vet and long-time proprietor of Eureka Ranch, is my favorite marketing guru. One reason is his ... Declaration of Dramatic Difference. Well, he doesnt call it thatI do. In Jump Start Your Business Brain, Hall gives us his Three Laws of Marketing Physics. The Law of Dramatic Difference is number three. It goes this way. Prospective customers evaluate a new product. Then theyre asked (1) if theyd buy it and (2) if they see it as unique. The firms execs in turn evaluate and weigh the prospective customers reactions. Without fail, the execs deciding to launch or not bet close to one-hundred of their marbles on the intent-to-buy question, and virtually ignore the uniqueness issue. The problem, or should I say THE PROBLEM: In actual fact the intent-to-buy response is a poor predictor of subsequent real-world success (or failure), while the uniqueness assessment almost perfectly predicts the true response to the product.
Maybe all those execs Hall has been coaching for the last twenty years should have listened to the Grateful Deads Jerry Garcia: We do not merely want to be the best of the best, we want to be the only ones who do what we do.
Cirque du Soleil redux, eh? Its the ultimate BHAG: only ones who do what we do.
(Only = Big Word.)
None of Halls client execs get it. Damn few anywhere get it. I decry those 100 percent shriveled imaginations, to be sure. (Not my kind of guys. Any of em.) But I also decry the subsequent poor economic performance of the enterprisesthe copycats, looking only to do a bit more of what we do with a twist or two, or to copy-the-leader. To grow, wrote W. Chan Kim and Ren Mauborgne in Think for YourselfStop Copying a Rival (Financial Times), companies need to break out of a vicious cycle of competitive benchmarking and imitation. Aiming to beat the competition has the opposite effect to the one intended. It keeps companies focused on the competition. When asked to build competitive advantages, managers typically rate themselves against competitors, assess what they do and strive to do it better. Don Listwin, CEO of Openwave Systems, has the guts to put numbers around this idea: How do dominant companies lose their position? Two-thirds of the time, they pick the wrong competitor to worry about. Listwin was referring to Nokias recent problems, which he attributes to copying Microsoft and offering a jillion overly complicated features that customers simply werent pining for. But to me a thousand alarm bells went off from my 35-year career in business. U.S. Steel worries exclusively about foreignersand is late to the local mini-mill party (Nucor, et al.). GM and Ford relentlessly follow each otherand dismiss the Japanese for years, even decades. Xerox does the same thing, gnashing teeth over IBM and Kodak and overlooking the Japanese. IBM, on the other hand, sees Siemens and Fujitsu in its dreamsand misses Microsoft (et al., et al.). And so on ... and on.
Jerry G. sets a high standard ... but is there any other in this madcap world?
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Richard Branson on Strategy:
Follow your passions.
Keep it simple.
Get the best people to help you.
Re-create yourself.
Play.
Source: Fortune on Sir Richard Branson, Virgin Group

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About Dylan Schleicher


Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.