The answer to
every strategic question is “it depends”. The trick is knowing what it depends
on. If the answer to a question isn’t “it depends” then it’s not a strategic
question.
This is Mazzeo’s
Law, a business school rule that its author and two fellow professors tested
out on independent businesses across the USA in a series of road trips. Their
book, The Roadside MBA, aims to provide real world lessons for entrepreneurs, start-ups
and small businesses.
Michael Mazzeo,
Paul Oyer and Scott Schaeffer write up visits to 45 small businesses to provide
lessons across 10 subject areas ranging from hiring staff to battling the big
boys. The businesses range from a fitness centre for older women to a company
that makes air socks and everything in between.
The book’s
strength is that it is a collection of the wisdom of people just like you,
running a small business and making a profit.
In Reno, Nevada,
they visit Christine Kelly, owner of Sundance Books and Music. How do you
compete with Costco and Amazon selling bestsellers so cheap, they asked. She
simply avoids competing by reducing her inventory in this previously good area
for sales.
“So how do you
make it these days?” they asked.
Her answer was to
spend time curating her shelves so her shoppers would enjoy browsing to
discover books they wanted; by retaining key staff who customers “look to for
recommendations from a familiar face”; by organising special events that her
customers like; and by publishing books with a regional theme or author.
The lesson:
“Understand the Big Boys’ strengths. It is important for small businesses not
to waste effort in activities for which large size helps; competing on the same
turf is not likely to be a winning strategy.”
The rules may
appear homespun but they are useful and there are plenty of them. For example
in the chapter on negotiating the authors advise: “It does you no good to
create value for customers only to see that value captured by suppliers or
partners instead.”
In five short case
studies they describe five strategies:
·
Knowing your next best options
·
Your ability to influence next best
options
·
Understanding investments and hold ups
·
Having better information
·
When you can go it alone.
None of the
strategies may be right for you. But you will recognise plenty about what is
going on when you talk to your suppliers and partners.
Some businesses
are designed to be scaled and some are not. The authors visit a coffee shop in
Gresham, Oregon that is inspired by its owner Leah McMahon and her ability to
work 14 hour days. She went from one shop to four and back again.
In contrast Ron
Savelle owns four grills 150 miles apart in Mississippi. After college he set
up a bar and paid it off in four months and then opened a second one. He had a
simple formula for success that could be easily copied: target a college
audience, undercut the national chains, and work to a three page checklist.
You have to
understand what successful growth depends on. The Roadside MBA will help you
answer all those “it depends” questions that you face. It will also help you
understand the final part to the Mazzeo Rule: strategy is never a solved
problem.
As an added bonus
the five pages on how a wholesaler to convenience stores picks his staff are
worth the price of the book. You will look at the world with new eyes.
Comments
Post a Comment