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