| Most big businesses are less agile than their | | | | saying "that's interesting" and letting it |
| smaller counterparts. Often, it's smaller, | | | | drop.Forgotten Rule Four. Have a purpose |
| nimble companies that spot the opportunity in | | | | you'd risk your house for.Goliath Worldwide |
| the market. The big corporation lumbers along | | | | has a vision statement -- "to provide |
| a couple of years later. By that time, the | | | | superior returns to shareholders", and a |
| opportunity has vanished or it's been locked | | | | profit share plan. If the company beats its |
| up.But there's an irony here. And it's this. | | | | consolidated profit target, managers can earn |
| Most large companies don't just pop into | | | | a bonus of up to 8% of their annual salary. |
| existence. They are small businesses that | | | | Sometimes they do, sometimes they don't. It |
| have survived and thrived. So, for at least | | | | depends more on the target and the economic |
| part of their history, they knew what it took | | | | climate than on what the managers do.The |
| to grow and to change - to create and | | | | directors of David Inc took out mortgages to |
| dominate markets.As companies mature, they | | | | start the business. If they don't meet their |
| concentrate on being big. They put processes | | | | profit target, they could literally lose |
| and procedures in place. They form committees | | | | their homes! But they're not worrying about |
| to create policy. They appoint planning task | | | | that, because they have an overriding sense |
| groups. They forget how they used to think | | | | of purpose. And it's not "to provide |
| and behave.And as a result, they slow down. | | | | superior returns to shareholders." They know |
| They become less innovative and more | | | | that they're making products they're really |
| defensive. They find growth harder to come | | | | proud of. They're genuinely making their |
| by. And their core markets are threatened by | | | | customers' lives better, and they feel that |
| changing consumer demands, by new business | | | | they're making the world a better place.Big |
| approaches, and by niche competitors.Consider | | | | companies set great store by a vision and |
| these two businesses. Goliath Worldwide has | | | | mission. Here's a fairly typical vision |
| good people, huge budgets, and decades of | | | | statement. "The Gillette Company's Vision is |
| experience. It launched a series of | | | | to build Total Brand Value by innovating to |
| successful brands in the 1950s and 1960s, and | | | | deliver consumer value and customer |
| then went international in the 1970s. In the | | | | leadership faster, better and more completely |
| 1990s, they cut costs and returned to the | | | | than our competition."Now this isn't wrong, |
| core. Now it's struggling, even in the | | | | or misguided. It's just not very interesting. |
| markets it helped to create.The newcomer -- | | | | It won't create a buzz. Nobody's going to |
| David Inc -- is growing the market and taking | | | | take a bullet in the chest for it. A vision |
| share. Four years ago, they launched a range | | | | and mission are fine. But a |
| of products called 'Dinc'. At first they sold | | | | well-thought-through purpose, on the other |
| through specialist outlets; last year they | | | | hand, is bold, clear, maybe impudent, |
| began selling through major retailers; now | | | | certainly inspiring. It provokes a |
| Dinc is growing its segment at the premium | | | | response.Take Apple. When Steve Jobs was |
| end of the market, and it's seen as a | | | | reappointed CEO of Apple, a reporter asked |
| 'must-have' brand by the retailers.Somewhere | | | | him "Can you turn Apple around?" His answer: |
| along the line, while Goliath was growing so | | | | "The goal is not to turn Apple around. The |
| successfully, it was also losing sight of the | | | | goal is not to move back into profit. The |
| things which made it work. What has Goliath | | | | goal is to make the best computers in the |
| forgotten that David is doing right -- and | | | | world."Forgotten Rule Five. Treat business as |
| can Goliath learn to be agile again? | | | | a journey, and involve everyone.Goliath |
| Forgotten Rule One. Spend extraordinary | | | | Worldwide has a massive formal quarterly |
| amounts of time with your customers.Goliath | | | | briefing process, which cascades through the |
| Limited conducts plenty of market research. | | | | organisation. Part one of the briefing is |
| Their agency filters the results and presents | | | | about the future -- about aspirations; part |
| them to the marketing team each month. The | | | | two is about the recent past -- about |
| marketing team selectively publishes research | | | | financial results. It is fair to say that the |
| results via email on a quarterly basis. Most | | | | two parts are not linked, and that strategy |
| of the emails are unread.David Inc's managers | | | | is not tracked. Directors brief senior |
| just spend time with their customers, at | | | | managers, who brief junior managers, who |
| least half a day each week, whether it's | | | | brief non-managers. Very few reactions are |
| watching them in stores, shadowing them in | | | | passed back up the chain, and when they are |
| everyday life, or observing them in focus | | | | the response is defensive.David Inc's three |
| groups.You may believe that David's approach | | | | owners go round the company briefing everyone |
| is unproductive. But what could be more | | | | themselves. They describe their business as a |
| unproductive than working without a deep | | | | journey. They talk about what's working and |
| knowledge of what your ultimate customer | | | | what's not working. They have a scorecard -- |
| wants?Here's an example. Michele Ferrero, the | | | | a set of a dozen metrics that they always use |
| late boss of Ferrero (one of the largest | | | | -- to tell the story of the company's |
| confectionery businesses in the world) used | | | | progress. Sessions are informal. Wine is |
| to spend two days every week just watching | | | | taken. Questions and suggestions and |
| shoppers. He created a steady stream of | | | | challenges are welcome. Valuable insights |
| hugely successful new products (including | | | | come out of the discussions.Many successful |
| Ferrero Rocher, Tic Tac and the Kinder Egg) | | | | business leaders describe business as a |
| which have perfectly met the needs of | | | | journey - Jack Welch, Bill Gates, Richard |
| consumers.And here's another. Terry Leahy, | | | | Branson. But only a few companies take that |
| the boss of Tesco, spends a day a week in his | | | | idea forward and involve all their employees |
| stores, talking to customers and staff. Is he | | | | in the journey.One way to do this is to |
| wasting his time? Well, Tesco is the largest | | | | create and publish a 'balanced scorecard' -- |
| retailer in Britain, and it's pulling away | | | | the concept developed by David Norton and |
| from its competitors.Forgotten Rule Two. Get | | | | Professor Robert Kaplan. This is a set of |
| under the skin of your competitors.Goliath | | | | linked measures which tell the story of what |
| Limited has a specialist competitor | | | | a business is trying to do.Another way is to |
| intelligence desk. Every two years, the desk | | | | create a cockpit, with details of the journey |
| produces profiles of all major players in the | | | | charted on the walls (e.g. the strategic |
| marketplace. Pages of data, charts and | | | | direction, a map of the marketplace, |
| analysis. Yet Goliath continually | | | | 'engines' such as brands or technologies, and |
| underestimates its competitors. For years, | | | | measures of progress).If these ideas are well |
| the sales forecasts have assumed that Goliath | | | | implemented, and pushed widely around the |
| will grow faster than their market, which | | | | business, they make strategy a continuous |
| means taking share from competitors. But they | | | | process owned by everyone.Conclusion and |
| never say which competitor, or how.David Inc | | | | tipsThese are the lessons that big businesses |
| is rather less formal. It has polled its own | | | | once knew but have forgotten. All of them can |
| employees about Goliath's strengths and | | | | be re-learned and put into practice.If you |
| weaknesses, and has made a guess at its | | | | can't change your whole business, then focus |
| likely strategic priorities. In fact, Goliath | | | | on your unit or branch or division or team. |
| won't start writing next year's plan until | | | | Or on yourself."Anyone who stops learning is |
| September, but David has already intuited | | | | old, whether at twenty or eighty. Anyone who |
| two-thirds of the sales and marketing | | | | keeps learning stays young." Henry FordSo |
| activities that Goliath will come up with! So | | | | how do these lessons also apply to |
| they can get on with pre-empting them right | | | | individuals?Spend time with your customers. |
| now.Sales and marketing professionals know | | | | Start by booking a couple of hours to visit |
| that they have to stand in their customers' | | | | your own personal customers, whether they're |
| shoes. It's exactly the same with | | | | inside the company or outside. Ask them how |
| competitors. The best way to understand your | | | | they use your services. Ask them what they |
| competitors is to stand in their shoes. That | | | | really need. Ask them what they like and what |
| means looking at the market from their | | | | they don't like. Ask them how you could |
| perspective and figuring out what you would | | | | improve what you do. Is there anything you |
| do if you were them.Here's an anonymous | | | | could stop doing? Look for opportunities to |
| example. (Companies who successfully outsmart | | | | make things easier for both of you. Most of |
| their competitors don't want to publicise | | | | all, find out what they love.Climb into your |
| their methods.) I worked with a major UK | | | | competitor's boots. Look at your services |
| business to understand a dangerous new | | | | from a competitor's point of view. (If you |
| competitor. We put ourselves in their boots | | | | don't have a competitor, lucky you; try |
| and effectively plotted our own downfall. | | | | imagining that a seriously impressive |
| Then we turned it around and figured out how | | | | colleague of yours IS a competitor.) What |
| to pre-empt them.Three months later, this | | | | would they say are the rules of the game in |
| competitor published a trade ad which set out | | | | your field? What do you have to do to be |
| its four strategic priorities. We had | | | | world-class? What do you have to do to take |
| predicted them all correctly, and the sales | | | | your game to the next level?Build your |
| and marketing campaigns to beat them were | | | | business on insights. As you talk to people, |
| already under way...Forgotten Rule Three. | | | | get them to tell stories about using your |
| Build your business on insights.Goliath | | | | services. Note down the positives - their |
| Limited has a sprawling annual strategic | | | | hopes and ideals - and the negatives - their |
| planning process, run at Goliath HQ. It | | | | frustrations and compromises. These unwitting |
| begins in April and the plan is eventually | | | | moments are how people give you |
| issued (to selected senior managers) just | | | | insights.Define a purpose that makes you feel |
| before starting work on the operating plan in | | | | proud. Choose one of those insights that most |
| September. A lot of experienced managers | | | | resonates with you, and set about bringing it |
| contribute to the process, but Goliath is | | | | to life in your work. A great way to be |
| aware that the plan never really comes to | | | | fulfilled in your work is to make your |
| life in the business.By contrast, David Inc's | | | | customers' lives even a little bit better.Lay |
| strategy looks chaotic. Conversations are | | | | out your journey and measure your success. |
| regularly held with people across the | | | | Goal-setters achieve more than people who |
| business, particularly with people at the | | | | drift. But goal-setting can be a dry |
| outside edge of the business -- people who | | | | activity. By thinking of your life and career |
| work with customers and suppliers. In the | | | | as a journey, with milestones on the way, you |
| 'cockpit' at their open plan office, the | | | | can make it more interesting. And the journey |
| directors write up every single idea on the | | | | will be shaped by what you now know about |
| wall and solicit comments and further | | | | your customers, your competitors, your |
| thoughts.They build -- and rebuild -- their | | | | insights and your purpose.Bon voyage!© |
| whole business on insights. An insight is | | | | 2005 Charles Kingsmill. You are free to use |
| hard to define, but you'll know one when you | | | | material from this article in whole or in |
| see it! It's a high value nugget of | | | | part, as long as you include complete |
| information that helps you see things in a | | | | attribution, including live web site link. |
| different way.If you look at successful | | | | Please also notify Charles Kingsmill where |
| innovative products, you can often see the | | | | the material will appear. The attribution |
| insight that lies at the heart of them. The | | | | should read: "By Charles Kingsmill. Please |
| iPod (and its equivalents): "I don't want to | | | | visit Charles's web site at for additional |
| carry around a pile of CDs, particularly as I | | | | information and resources on growing your |
| only like two or three songs on each." Bratz | | | | business." (Make sure the link is live if |
| (the dolls that gave Barbie a slap): "I like | | | | placed in an eZine or in a web site.)Charles |
| the sassy attitude of female celebrities -- | | | | Kingsmill works with medium and large |
| it's part of their glamour." The Smart car | | | | businesses who have set themselves |
| (the Swatch on wheels): "why should I -- or | | | | challenging growth targets. His services |
| my business -- give up my individuality when | | | | include Strategy Action Teams and Competitor |
| I buy a small city car?"Most big businesses | | | | Wargaming. Visit Charles's website at where |
| are rightly concerned with Knowledge | | | | you can download a growth questionnaire and |
| Management. But managing insights is even | | | | free workbooks, as well as subscribing to his |
| more fundamental. It takes courage and energy | | | | e-zine "Mission Control. |
| to DO something about an insight, rather than | | | | |