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May the best panacea win
By Bob Lewis | September 21, 2009
Topics: Industry Commentary, Leadership, Organizational Effectiveness, Strategy and Tactics | 8 Comments »
If it isn’t a miracle, it’s close.
A full-page ad from General Motors displayed an appealing-looking (except for Chevy’s hokey bow-tie logo) Malibu. The ad’s tag-line: “May the best car win.”
Other than its Cadillac brand, General Motors hasn’t sold the desirability of its cars in decades. It’s finally pursuing a seldom-stated business panacea: Sell products people want to buy.
This seems to be the year for business panaceas. Not a few recent books have presented the formula for business success.
Adam Hartung’s Create Marketplace Disruption insists that sustainable success can only come from “white spaces” where you create or redefine marketplaces rather than competing in existing ones.
Meanwhile, Michael Hugos figures the secret is Business Agility — the ability to rapidly respond to opportunity, supported by IT that’s integrated into the business and ready to support the “good enough now beats perfect too late” principle.
And, as mentioned last week, Steven Spear has joined the fray with Chasing the Rabbits, which concludes that success comes from understanding your operation more deeply than your competitors.
Every one of these books contains excellent ideas and advice. Except … they disagree, with each other and with earlier the-answer books like Jim Collins’s Good to Great.
What’s going on? The authors used differing criteria to select their organizational models, that’s what.
Good to Great relied on long-term growth of shareholder value. Create Marketplace Disruption found companies that succeeded by doing what the title implies, and others that failed by apparently failing to do so, with Apple as the exemplar of success and General Motors as the exemplar of failure.
Business Agility was based on the author’s first-hand experience, and Chasing the Rabbits started with Toyota and followed with other organizations that pursued similar approaches and achieved success by doing so.
Choose different role models; reach different conclusions.
I’m rarely certain, but I’m certain of this: Chasing the Rabbits in particular will meet with lots of lip service and little follow-through. To understand why, first consider a very different realm.
Imagine you wanted to contribute to the fund of human knowledge with respect to, say, string theory. Here’s what you don’t do: Post your resume on Monster.com, get hired, go through orientation and a bit of on-the-job training, find your cubicle, and start running experiments at the Large Hadron Collider.
To make new contributions to a scientific field you first have to learn what is already known.
In Spear’s high-velocity organizations, new employees face a similar if less brilliance-demanding situation. Because these organizations are designed from top to bottom to gain deep knowledge of how things work, new employees first have to acquire the relevant parts of that knowledge before they can be productive. Even line workers receive weeks of training before they are allowed to participate in the building of real products for sale. For managers, the time is measured in months … essential if they are to make positive contributions instead of doing damage.
Everything about Spear’s book is convincing. And it completely fails to account for Apple Computer, whose success Hartung explains rather well. Apple has been a spectacular success in portable electronics and entertainment distribution. Its success is due to its ability to reinvent marketplaces, even though it’s the anti-Toyota of quality (the first several iPod generations sported defect rates of 20% and more, which Steve Jobs defended as normal … not to mention the reports of spontaneous iPod combustion.)
Spear’s “rabbits” are high velocity in very deliberate ways that have an entirely different tone from Hugos’s differently-successful agile businesses. The rabbits get better and better at what they choose to do. Agile businesses get better and better at responding to novel situations.
It sure would be nice if, instead of presenting the answer, authors would present an answer and describe the circumstances for which their answer is suited.
But since they don’t, I will.
Start with an old formulation — that business strategies fall into three categories: Product innovation, customer relationships, and operational excellence.
Hartung’s “Phoenix Principle” provides strong guidance for companies that depend on product innovation. Hugos’s agility is for those that live and die on strong customer relationships, and the individually tailored services they depend on. Operational excellence is where Spear’s high-velocity rabbits hold sway.
You need to integrate IT into the rest of the business, collaborating throughout to help it achieve and maintain success. And as the plethora of convincing panaceas makes clear, while many formulas work somewhere, none work everywhere.
Your challenge: Figuring out which will work at your “where,” and what IT has to do to support it.
It’s KJR’s business panacea: Form follows function.
Bob Lewis is president of 
Insightful as ever. And timely, as I’m trying to sum up my strategy for a consultancy team I have recently taken over, so thank you for that. No reference to my own personal strategy maxim though, which is that most companies succeed despite themselves, not because of themselves.
Bob,
Maybe success comes down to look & listen – to the market place, to the workers, to the competition, to the visionaries… Then assimilate and go do what you do best when and where it fits.
just my 2 cents.
Calling Chevy’s bow-tie logo hokey, in my view, is a compliment. Seeing today’s lack of civility and responsibility, especially in business, I believe we can all use a little more “hokey-ness”. I am an IT Manager, I drive a 1971 Chevy pickup with a V8 engine, I can still get nearly every part I might need. Here’s hoping GM will take your advice and “Sell products people want to buy”. I’ve never written in before, thanks for all the great columns over the years.
Start with an old formulation — that business strategies fall into three categories: Product innovation, customer relationships, and operational excellence.
Bob, do you think these three strategies are inherently in conflict with each other? I can see justification for thinking this is so, viz:
- product innovation = higher number of product lines with rapid turnover, which means customer service is more difficult to coordinate and operational excellence harder to stabilize.
- customer relationships = tailoring your services to meet customer needs, which is the complete antithesis of a SOP, and once you establish a niche it may mean sacrificing innovation for stability
- operational excellence = deliver an outcome with high reliability, which implies a one-size-fits-all approach and also requires stability of inputs and outputs.
I’m not sure it’s valid to generally label Apple the “anti-Toyota” of quality. While you could make that assertion regarding their portable entertainment gear, there are many loyal Mac users who have been running their computers for far longer than the equivalent PCs.
The book Create Marketplace Disruption sounds remarkably like Kim and Mauborgne’s Blue Ocean Strategy published in 2005.
Hi Bob,
Another in your series of brilliant “stating what should have been obvious” columns.
And I completely agree with your forecast about “Rabbits.” GM was HANDED the Toyota production system on a silver platter in the NUMMI plant experiment a quarter century ago. That plant went from worst to first within GM with the same workforce. They chose to ignore the message, neither the first nor last “don’t rock the boat” decision by GM’s management. That eventually sank the boat…
Keep it up, and again, thanks.
Bob, you consistently nail your subject. The basic problem with most business literature is the unscientific nature of the analysis performed. By sifting common factors from a number of examples of success (however it’s been defined), one has a best determined a hypothesis for business success. Unfortunately, most gurus stop there, expand their results into a book-length paper and move on to the speaking circuit. Full analysis would immediately seek to test the hypothesis by (at least) looking for other organizations using the common factors but failing. Bonus points if the factors can be isolated from other aspects of the organizational environment!
Keep up the good work.