It is complicated
Doesn’t it seem that we spend way too much time doing things that we don’t like to do and not nearly enough time on what we enjoy?
Or, we work really hard, but it doesn’t get us the results we seek?
There are so many ways to do things, yet we do them in the same way we always did them. It just seems easier, or faster or less complicated.
But, life is complicated. And, sometimes we need to get really clear about where to focus.
Working with a wonderful team at a growing entrepreneurial company I suddenly realized that while we were talking about strategy at the 30,000 foot level, it was not what they most needed to do. They didn’t need one more exercise in strategic goal setting, but rather to take one idea and peel it down layer by layer until every commitment and each step was on the calendar for all employees involved in making this project a success. This is a company that is always in such a hurry to put out the next fire, that customers who should have been ecstatic with the quality of their product, were left annoyed at small details that weren’t addressed.
Sometimes we just need to focus on execution. If it is not working take it apart and try doing it another way-stop suffering.
What’s in a Strategy?
In today’s Wall Street Journal Nov. 30, 2009, there is a front page article on Oracle CEO Larry Ellison’s decision to vertically integrate through its purchase of Sun Microsystems which makes hardware, something Oracle never did before. In fact, Oracle’s strategy for the first time in its 32 year history is to create a conglomerate of computer software, hardware and components like “TJ Watson Jr’s IBM”, Mr. Ellison said in September.
SO, what’s in a strategy? When do you hold ‘em and when do you fold ‘em? In Mr. Ellison’s case, it was opportunistic. He suddenly had access not only to Sun’s software, for which he originally bid, but the hardware and computer components business as well. Mr. Ellison began to think about the benefits today in vertical integration. Lots of other companies are doing it too. Companies that were selling off parts of the business to be more efficient only 2 years ago are selectively buying parts that they now want to control. SO, would that work for Oracle?
Well, guess what? Times and conditions change. We make certain assumptions about the world when we set a strategy. Assumptions like, the dollar is stable and the banking system can depend on the US market. Or, the basic commodities on which my company depends will be cheap and readily available. Or, I can count on delivery times from my suppliers. Efficient world markets and ready supply of commodities made this all true for many years. Now, that has been challenged and companies that could afford to focus on only what they excel at are now looking at gaining back direct control. Their assumption that we could depend on efficient markets is no longer certain. If they cannot deliver the correct product at the correct time at a fair price, they will not maintain their dominance in the market.
Secondly, the break-up of large conglomerates accelerated efficiency in the market. All the benefit from that has been incorporated in these new companies. Future growth has to come from something else. Each of these suppliers had to make a profit along that chain. By, integrating them, some of that profit and some of the redundancy (back office, overhead, etc) can be squeezed out at the same time as control gets tighter. This will benefit the new conglomerate and ultimately the customer.
Thirdly, a strategy is not written on a stone tablet. Many competitors exist in a given market with differing successful strategies. You do need to have a strategy and to take careful steps to execute that strategy. You do need to evaluate your success with a cold eye. If it is not working then you do need to figure out whether another strategy is likely to be better. That’s what Ellison did. Is he right? According to the Wall Street Journal Ellison said, “We’re really brilliant, or we’re idiots.”
The New Normal
This is the “New Normal”- What now?
Wall Street seems to believe that we have bottomed out.
Down on Main Street, we are working with reduced staff, reduced pay, and reduced profits- if there are profits. Down on Main Street, we don’t see hiring anyone back, or anyone new, for months. Down on Main Street, that sure doesn’t look like a recovery.
So, if this is it, this is where we are going to be hanging out for the next year, what do we have to do to get comfortable with NOW? What do we have to do to increase revenues, to keep staff motivated, to retain existing customers and get new ones?
We are almost at year end. Time to make a plan for success in 2010. Some people are going to figure out how to outperform the market in THIS market. Will you be one of them?