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.
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