Observation, Evolution And Sheep

OBSERVATION, EVOLUTION AND SHEEP

 By: Robb Good, Pres­i­dent Good & Roberts, Inc.

I’m an observ­er.  For most of my life I have made a good liv­ing by pay­ing atten­tion to what is going on and quick­ly adapt­ing or doing the oppo­site.  I say do the oppo­site because some­times the crowd tends to blind­ly fol­low like sheep.  It’s not good to be a sheep, espe­cial­ly when there are cliffs around.  It helps when you are an observ­er to also have a good dose of com­mon sense and thank God, for some rea­son, I got a good help­ing of that too.  So what’s the point to all this observ­ing?  To spot changes quick­er, adapt faster, and thrive.  I think Dar­win called it evo­lu­tion, but for all the whin­ing I hear today, you would think evo­lu­tion was a new con­cept.

 

It’s no secret the econ­o­my isn’t exact­ly on fire.  It is also no secret that many indus­tries are real­ly suf­fer­ing while some are even dying.  New tech­nolo­gies, new busi­ness process­es and stiff com­pe­ti­tion are the con­tribut­ing fac­tors of busi­ness evo­lu­tion.  If you had any doubt, just ask Kodak, Block­buster or Cir­cuit City.  These are good exam­ples of peo­ple who were not observ­ing or adapt­ing to the times.  The oth­er fac­tor in evo­lu­tion relates to gen­er­a­tional shifts.  I often tell peo­ple that my great, great grand­moth­er was shocked to dis­cov­er that my wife did not know how to make but­ter.  While this news is shock­ing to great grand­ma, the real­i­ty is that this par­tic­u­lar skill is no longer nec­es­sary in this cen­tu­ry.  Atti­tudes evolve, tech­nolo­gies evolve, and busi­ness evolves.  How many things from the past are you hang­ing on to that no longer mat­ter or have become irrel­e­vant?  What do you do to make your busi­ness rel­e­vant and com­pet­i­tive in the cur­rent land­scape?

 

I man­age com­pa­nies in two indus­tries, tech­nol­o­gy and con­struc­tion.  Hav­ing a foot in both ponds I see two very dif­fer­ent approach­es to defin­ing com­pet­i­tive­ness.  In the tech­nol­o­gy world com­pet­i­tive­ness is defined by inno­va­tion.  In con­struc­tion it is defined by cut­ting cost.  I am prob­a­bly one of the few busi­ness lead­ers who think Wal-Mart got it wrong.  The con­stant dri­ve to low­er prices is not a sus­tain­able mod­el.  Even­tu­al­ly after most of the waste has been elim­i­nat­ed from oper­a­tions, the next lev­el of cost cut­ting comes at the cost of your employ­ees, sup­pli­ers and often, loss of qual­i­ty.  The rec­i­p­ro­cal effect of this price cut­ting phi­los­o­phy also has a dev­as­tat­ing impact on the sup­ply chain, local jobs and our com­mu­ni­ties.  I don’t know about you, but I am real­ly tired of buy­ing crap made in Chi­na.  I will glad­ly spend a cou­ple extra bucks to buy a qual­i­ty prod­uct that lasts. When the focus is pure­ly cost and the only way to make a prof­it is at the expense of your sup­pli­ers or employ­ees, I believe you are sewing the seeds of your even­tu­al demise.

 

In the tech­nol­o­gy world suc­cess hap­pens when you inno­vate. There is no bet­ter exam­ple of this than Apple.  Five years ago I gave the keynote address at the San Diego AGC Tech­nol­o­gy Brief­ing Round Table.  I made the state­ment that the recent­ly launched iPhone would become the per­son­al com­put­er of the future.  The basis of this pre­dic­tion was found­ed on the obser­va­tion that, once again, Apple had cre­at­ed a new com­put­ing par­a­digm.  In a room full of Black­ber­ry and Win­dows users this was met with a lot of skep­ti­cism, but if you had spent any­time using the iPhone, it was clear that it was the game chang­er.  Nobody in the cell phone or com­put­ing indus­try saw this com­ing, nor did they con­sid­er Apple to be a seri­ous threat.  In five very short years, the iPhone has rein­vent­ed the cell phone indus­try. The once dom­i­nant play­ers like RIM and Nokia are now slash­ing cost and lay­ing off employ­ees in a des­per­ate move to sur­vive.  How did Apple do this?  Cer­tain­ly not on low price or at the expense of their employ­ees or sup­pli­ers, rather they did it by redefin­ing the mar­ket and cre­at­ing val­ue while deliv­er­ing an incred­i­ble cus­tomer expe­ri­ence.

 

There are many good exam­ples of com­pa­nies who cre­ate great cus­tomer expe­ri­ences.  None of them are known for hav­ing the cheap­est price.  In some cas­es, like Star­bucks, they dom­i­nate their mar­ket seg­ment.  Even in a dif­fi­cult econ­o­my these busi­ness­es have thrived, not because they slashed cost and jet­ti­soned employ­ees and not because they treat­ed their sup­pli­ers and cus­tomers poor­ly.  They thrived because they ran a smart busi­ness.  They stay focused on the long term by build­ing a sus­tain­able busi­ness with great mar­ket­ing. 

 

In the con­struc­tion indus­try we do a hor­ri­ble job of sell­ing val­ue.  Instead we large­ly com­pete on price.  This price-focused men­tal­i­ty does not make a lot of sense to me when you con­sid­er that con­trac­tors take on enor­mous risk, build one-of-kind facil­i­ties and suc­cess­ful­ly coor­di­nate hun­dreds of sup­pli­ers who often times have nev­er worked togeth­er before.  It is an inter­est­ing obser­va­tion that many of our cus­tomers will shop at Apple, Star­bucks, and Nord­strom, but when it comes to mak­ing a large risky pur­chase of con­struc­tion ser­vices, they base the deci­sion on who offers the low­est price.  We are not sell­ing sophis­ti­ca­tion and expe­ri­ence when we are only sell­ing price.  It takes real cre­ativ­i­ty and real inno­va­tion to com­pete on val­ue and it is time for the con­struc­tion indus­try to evolve.  Our future depends on devel­op­ing sus­tain­able busi­ness mod­els and uti­liz­ing mar­ket­ing effec­tive­ly to sup­port that effort.  Good mar­ket­ing edu­cates the con­sumer and rein­forces the brand.  As busi­ness lead­ers we must have courage to invest in a mar­ket­ing strat­e­gy, new tech­nolo­gies and the adver­tis­ing and resources required to sup­port the mes­sage.

 

In the ear­ly 90’s I worked as a tech­nol­o­gy con­sul­tant..  In those days busi­ness lead­ers con­stant­ly asked me the same ques­tion, “Do I real­ly need a web­site?”  Today the ques­tion I hear most fre­quent­ly debat­ed is, “do I real­ly need social media?”  It is not a real­ly hard ques­tion to answer if you’re pay­ing atten­tion to the gen­er­a­tional shift and how the web envi­ron­ment is evolv­ing.   While many of us are still fig­ur­ing out how to effec­tive­ly use social media, the coura­geous ones are putting a toe into the water and prepar­ing to take the dive.  The ben­e­fit of social media is that it pro­vides anoth­er avenue for start­ing a con­ver­sa­tion with a cus­tomer and it can play cru­cial role in your mar­ket­ing strat­e­gy.  The choice is whether you want to evolve now or scram­ble to play catch up lat­er.  In chal­leng­ing times the coura­geous ones pave the way, while the whin­ers fol­low the sheep.  It’s not good to be a sheep. 

 

Real lead­er­ship requires courage. It’s time to stop play­ing it safe and start tak­ing risk again.  It’s time to inno­vate.  We can all sit around wait­ing for some­one else to do it first, or we can take the gam­ble on new inno­v­a­tive ideas.  If you want to know how play­ing it safe turns out, just ask RIM.

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