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“In the first 10 seconds…we even confused the officials”

August 20, 2010

“In the first 10 seconds…we confused [the opposing team]…and we even confused the officials.”

–       College football player commenting on the 1st use of a then revolutionary new strategy and set of plays, based on the Canadian Football League (CFL) and previously unheard of in the US

It’s time to switch business mindsets from staying in business to growing at the expense of others, even in stagnant markets.  Since your competitors are going through the same thought process and went through the same MBA programs, like that successful football coach it’s time to bring in a game changing model to business.

Much like that flexible approach to football, we have to think of simultaneous defense and offense. What can be done quickly and inexpensively?  Much like adapting the CFL based strategy to the US college game, we have a major weapon at our disposal – rethinking everything we do in terms of playing simultaneous offense and defense around not just your customer, but your ‘customer’s customer’. The added non-linear thought is to realize that Small and Medium Enterprises (typically those with revenues up to USD5b) have limited resources and so fighting a set-piece battle with a larger competitor is not very smart, but acting in a flexible and dynamic fashion can overcome any disparity in resources brought to a market.

The University of Colorado, in 2009, published a very interesting framework around combating cyber warfare, where it outlined how to win by combining simultaneous defense and offense and which we’ve restated here in business terms.  Why compare ourselves to fighting cyber terrorism?  Because continuously responding in small groups on a fast and direct basis is the SMB game changer.  And since tactics without priority is wasteful and ineffective, the series presented below adds up to a cohesive defense/offense competitive strategy for SMB’s in the current economic climate:

Continual Defense

1 – Influence visions of the solution in the customer’s head by writing the product category narrative as we described in previous postings. Be specific, keep generalities off and adjust everything to make the narrative real.

2 – Protect your existing customers, such as relying on OTIF (On Time In Full – the measure of getting it right, on time, the first time as a % of all orders) and always be aware your ‘customer’s customers’ are your real source of revenue.  Each C Level executive should be assigned a set of high-profile customers with whom to establish an ongoing peer relationship at the very least for alignment and early warning. The goal is to avoid surprises such as “we warned you for 2 years and now we’re done”.

3 – Detect trends early before they become facts by getting out of the office and seeing first hand if you have delivery or quality issues which are starting to annoy either your customer your ‘customer’s customer’. When is the last time a C-Level executive visited the stocking distributors or delivery agents?

4 – Respond immediately before momentum shifts away from your product. When was the last time you did qualitative market research to learn new trends and nuances about your products?  Have you tested your packaging, messaging and color changes?

5 – Restore your control over the category through intensive efforts, not just a series of 1 time panic based initiatives.

6 – Deny entry to any competitors by not fumbling.  Your best investment for defense is operational excellence both at your firm and downstream with distributors, trucking companies and overseas producers. Start aggressive vendor tracking and by all means, develop detailed sales forecasts and KPIs which are continually reviewed.

7 – Exploit any barriers to entry by competitors

Simultaneous Offense

8 – Disrupt the market such as Hyundai’s Ownership Guarantee during the height of the recession was a complete game changer. The iPod changed how people are entertained from ‘our way’ to highly customized per use.

9 – Degrade the competition’s ability to be 1st to market with a new product or business model by being there 1st.  If you can, go to the prime supplier of a certain key component and buy all their output for a period of time, giving you the best price and denying anyone else this key component.  A unique wheel, handle or silicon chip makes no difference – either your competitor has the parts or their ERP Production Module will show ‘Cannot Build’ status.

10 – Purchase competitors.  Even if they rebuff your offer, the diversion of brain cycles while they study alternatives is a ‘win’.

Execution Culture

Finally, there is one category which we tried to build into both Defense and Offense and the truth is, it has to be omnipresent and so we’ll discuss it here.  Execution is everything.  It’s more than a business model, its cultural both across your company and by location if you’re a Global enterprise.  For example, in certain countries, close-enough is fine, that is, until someone who believes in perfect cleans up the market.   One of the best examples of cultural mismatch is the doomed Chrysler-Daimler annexation.  Chrysler’s culture on execution was cowboy, rapid, cost is everything and Daimler’s was ‘be the best at any cost’.  It was the battle of execution cultures, ‘close enough’ vs. ‘perfect’.

Mergers and acquisitions have to deal ahead of time with identifying and normalizing execution culture.  Merging data systems, databases, product offerings, etc. is hard but doable given some serious grunt work. Changing to a single, formal execution culture, particularly one of ‘excellence in everything we do’ is really hard and has a series of downstream and upstream impacts.  I recently visited a plant, overseas, where some furniture moldings didn’t line up properly to be fastened by a single glued dowel. The answer was to take out a drill from under the workstation and drill a bigger hole so the dowel could be wiggled into place, even though it left a gap.  Their execution culture was permissive of getting it done, even if it meant quality and customer satisfaction suffered.  The potential acquirer, with a more perfection driven execution culture, realized how hard it would be to change this mindset and decided to pass.   This factory’s only saving grace was a sort of closed market but if anyone from China ever realizes they can import inexpensive but perfectly made furniture, all bets are off on this factory.

Even in the US, we have different execution cultures. I recently rented a brand new (600 miles) 2010 GM crossover where the trim piece alignment between the doors and the dash were off by about 1/3 of an inch.  My thought was “old habits die hard, it must be a one-off problem”,  but then I saw a similar model on a NY street just recently and sure enough, that misalignment was there.  The execution culture has not changed and since other car companies selling $40K+ crossovers have perfection oriented execution cultures, that IPO should be an interesting play once the stock is trading beyond opening day hoopla levels.

As an aside- the full quote about the first ever execution of that new football strategy was actually:

“In the first 10 seconds we confused ourselves, we confused [the opposing team] and we even confused the officials.” By the second game they went on to win impressively. Once the new strategy and execution culture was adopted by all the players deep in their personal DNA, this team went on to an impressive winning season.

Double dip; extended recession.  No one really knows but one thing is clear – at the end of each economic dip one company emerges as the leader in its categories and markets and they are the ones who combine defense, offense and the perfect execution culture.

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached at richard.eichen@growroe.com

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