You don't have to be lucky to be a success

There are five things that most people get wrong about what makes great companies succeed. Great companies are not led by risk takers. They do not innovate more than their competitors. They are not quicker to react to change. They don’t change the way they work. And they don’t have more good luck.

In Great byChoice, written by Jim Collins and Morten Hansen, the real attributes of success are analysed and presented in a way that will help any business leader think about what she is doing well and where she needs to improve.

But first a spoiler alert. If you are a fan of Robert Falcon Scott, this book is not for you. Collins and Hansen use a discussion of the ways that Roald Amundsen and Scott approached their 1911 race to be first to the South Pole to demonstrate how the findings above make the difference between life and death.

While the book runs to 304 pages, mostly to back up the authors’ arguments, you can get a great deal out of reading the stories. In just six pages they explain why “Amundsen and his team reached home base in good shape on January 25, the precise day he’d penned into his plan. Running out of supplies, Scott stalled in mid-March, exhausted and depressed. Eight months later, a British reconnaissance party found the frozen bodies of Scott and his two companions in a forlorn, snow-drifted little tent, just ten miles short of his supply depot.”

Who are you like Amundsen or Scott? they ask. And using 14 comparison companies in pairs (Microsoft versus Apple being one surprise) they challenge you to think about how you have organised your business for success - or not.

Ponder on this. Southwest is the most successful airline in the world. Its comparison company was Pacific Southwest Airlines based in California. Its president Lamar Muse openly admitted that it copied PSA’s ideas.

“We don’t mind being copycats of an operation like that, said Muse in 1971 referring to visits he and other Southwest executives made to PSA as they assembled their operating plans. The visiting entrepreneurs took notes on every detail and they returned to Texas with copious notes and a set of operating manuals that they used to mimic PSA’s model to the smallest detail. Lamar Muse wrote that creating the operating manuals for his upstart airline was primarily a cut-and-paste procedure.”

PSA was happy to share because before deregulation Southwest could only operate in Texas and not in California. However, PSA failed because when deregulation came and when oil shocks and pilot strikes and other turmoil came, it abandoned its plan. Southwest stuck to it and it has been profitable every year.

The big lesson for the local shopkeeper is to copy the best (as Jim Walton did for Walmart) and stick to your plans.

“In the end, we can control only a tiny sliver of what happens to us. But even so, we are free to choose, free to become great by choice.” If you are looking to benchmark your strategy and this appeals to you, then you will find a lot of value in this book.

For more, see www.betterretailing.com.

Three secrets of great merchandising

Look at the ceiling and top wall of this McDonalds restaurant. There is a picture of two good looking healthy people having fun and some bright primary colours. Ask yourself what is the purpose of this picture? In the latest issue of Retail Newsagent in a feature on merchandising, Andrew Knight of RI tells its independent readers that they need to think about using sharp pictures of non-packaged products linked to people consuming goods. Perhaps this has been taken to the next level by the fast food chain - that is selling the feeling of being happy and healthy rather than the products. A second, related tip from the same feature is made by most contributors - it is vital to keep windows clean and clear of clutter. "I believe that less is more," says Roli Ranger, a retailer from Ascot, Berkshire. He has posters for promotions in between the windows that are regularly updated and discreet signs in the windows. Third, a highly visible well-stocked promotion at the entranc...

Busy street, empty shop, missed profits

True in part to my New Year resolution, I held a business meeting in an independent coffee shop today just next door to a Starbucks. The cafe was presented well and four staff were busy preparing for the lunchtime rush, at 11am. As my guests were late, I had a half hour overview of footfall on the street outside and in the restaurant. Six customers. Barely enough to form the queue in Starbucks or Pret-a-Manger just down the road. Plus one Italian girl who dropped off her CV. Some people stopped to look at the posters in the window and moved on. The owners seemed quite happy. When I left just after 1215, they were doing brisk trade. However, I have the impression that the business is not working hard enough. It could easily have managed 120 customers between 11 and 12, instead of 12. This is lost profit as the fixed overheads and staff costs are already in place. The owners are clearly busy - perhaps too busy to take time to look at the potential that their cafe has. What shou...

Sticks and stones do hurt

My 17 year-old son returned from a rock festival this week wearing a wristband proudly declaring him 0ver 18. He explained how easy it had been to use someone else's ID to get the identification and said it was ironic that he had not needed to show the over 18 band when buying alcohol. Today, Scottish retailer Abdul Qadar is complaining that public authorities are asking people to lie about their age when making test purchases. What trading standards officers may be forgetting is that the fact that retailers invest in a business premises and trade consistently from it make their job much, much easier. The alternative, a world of markets and itinerant traders, will be far harder to police. Mr Qadar's sense of injustice is fair. Those retailers, like Mr Qadar, who value their investment will seek to trade legally and will not sell alcohol to people under the age of 18. Asking children to lie about their age to local traders is a slander on all retailers.

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