Great Leaders Take Risks
Great minds think alike. And therein lies the problem.
If everyone thinks the same way, then everyone is going to come to the same conclusions, and creating something different than the other guy is going to be extremely difficult. The problem is compounded, argues, by the fact that companies consistently get in their own way. And the more success the company achieves, the more difficult it becomes to see something new.
The argument — which academics such as Jeffrey Pfeffer of Stanford refer to as a "competency trap"—goes like this: Let's say you introduce a new product — it doesn't matter if it is soap or software — and it is successful. The more successful it becomes, the more resources the company puts behind it to increase profits. The more money the company makes, the more specialized it becomes.
But as it becomes more specialized, management becomes locked into a intolerant way of seeing the world. That makes it hard to spot new trends and deal with market changes. Joachimsthaler, who runs a strategy and marketing consultancy, provides a great example: Sony was so successful with its Walkman that it failed to notice how consumers were changing the way they bought, listened to, and stored music. Apple's iPod captured a market that rightfully should have been Sony's, says the author.
The way around the competency-trap problem is threefold, argues Joachimsthaler. First, executives need to see customers as people. Look at how these potential buyers live their lives, identify their needs, focus on how those needs are changing. Maybe what the company is offering makes sense, but perhaps, as noted in the Walkman-iPod example, what they want is not what you got.
Second, constantly challenge what has worked for the company in the past to avoid a Walkman-type pitfall. Finally, "design strategies around people's behaviors." Think Starbucks: it sells coffee and other drinks and goodies everywhere people are likely to be enticed by the aroma of fresh-brewed ambrosia — in retail stores, supermarkets, shopping malls, college campuses, airplanes. They key, says Joachimsthaler, is making sure the company focus moves beyond the organization.Paul C. Williams
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