21 steps to conquer your market(s)

Environmental Forces - influencing competitive...

Getting there first is not what it’s all about. What matters always is execution. Always.”

Facebook’s head of product, Chris Cox

There have been a lot of articles written in the past on the merits of being the second mover into an area of business , proceeding to become the market leader. Recently, the best product to succeed has been the iPhone.

I wanted to go behind the scenes and contribute by adding the fact that businesses do indeed succeed by being the second or third mover but success happens due to many factors. All of these factors or some of the ones that I will discuss amalgamate to create the success or competitive advantage/tipping point.

I have created a ‘second mover toolset’ for CEOs and senior management (In no particular order) that helps to create a synergy between business strategy, culture and employees (people).

1. Business/IT Strategy: Steve Jobs – SJ – “We do no market research. We don’t hire consultants.”

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

2. SWOT analysis: As soon as you join/start a company as a CEO, make a list of strengths and weaknesses of yourself and your company on a piece of paper. Don’t hesitate in throwing bad apples out of the company.

3. Spotting opportunities: SJ – “We all had cellphones. We just hated them, they were so awful to use.”

The lesson that can be learnt is that CEOs need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

4. Focus: SJ – “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

A CEO needs to focus on the most important issues that are relevant to the business and to shy away from the issues/projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

5. Know your business and innovate: SJ – “I put out an agenda — 80% is the same as it was the last week, and we just walk down it every single week.”

The CEO and the entire business need to know how the business operates, preferably, as intricately as possible. It is that complete overview that will allow innovative opportunities to present themselves.

6. Handling barriers and roadblocks: SJ – “And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better.”

7. Customer conversion: SJ – “But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk.”

CEOs need to help the business by helping to identify opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

8. When the going gets tough, investment in people always pays: SJ- “What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off.”

I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CEOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader. This means that they need to stand by that conviction and avoid losing people in economic downturns.

9. Successful innovation and success in general may be built on failure: SJ -. “Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.”

Apple has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others such as the iPod and iPhone will be huge successes. Many businesses lack of innovation is due to their fear of failures.

10. Family commitment: Michael Dell – MD “I think we make a priority to bring balance into our lives. To me, family is very important. So if you look at my schedule, one of the things I realized a long time ago is that there is a limit to how much productive work you can actually do in a given week. There’s also the happiness factor; if you want to do something for a long time and be really good at it, you’d better have a strategy that is sustainable and works within what’s going on in the rest of your life. For me that means that I’ve got to have time with my family; I’ve got to have time to exercise; I’ve got to have time to sleep; I’ve got to be able to take my kids to school.”

This is an aspect of life that I firmly believe in as well. Time cannot be turned around or replaced. It is very important that we spend time with spouses and spend time with our children. As they grow up we have to ensure that they become responsible and active citizens. A work/life balance is crucial and ensures that we work optimally.

11. Learning: MD – “Continuous learning is also important.”

All great leaders have made it a habit to constantly learn. MD visits the companies that impress him by paying them a visit to learn how to improve himself and Dell. Other leaders such as Bill Gates are very well read and read books to improve their knowledge. The knowledge of all great minds, past and current, is available. It is upon us to seek that knowledge.

12. Risk assessment and crisis management: Warren Buffet – WB ‘If there is any significant bad news, let me know early’. The team need to have confidence in the CEO, in order that ‘bad news’ events/issues/problems can be resolved prior to them mothballing to the ‘point of no return.’ ‘An investor needs to do very few things right as long as he or she avoids big mistakes.’

13. Business reputation: WB – ‘Look at the business you run as if it were the only asset of your family, one that must be operated for the next 50 years and can never be sold’. He adds that ‘We can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation.’ CEOs need to understand that as witnessed by the recent BP oil spill crisis. It had a devastating effect on BP’s reputation, wiped millions off its share price, cost billions to settle claims and control the oil spill. Additionally, the irrecoverable loss of both human and marine life, coupled with the environmental damage leaves the oil giant in shambles.

14. Quality management: ”What I must understand is why someone will continue to get out of bed in the morning once they have all the money they could want,” Buffett says. ”Do they love the business, or do they love the money?” CEOs need to have a team that enjoys working within the associated line of business.

15. Trustworthiness and integrity: Developing characteristics such as trustworthiness and integrity, Buffett believes, is a matter of forming the right habits. “The chains of habit are too light to be noticed until they are too heavy to be broken,” he says. People who stray from these values often show up on Wall Street; they may initially even shine; but eventually they self-destruct. “That is sad, because it does not need to happen,” says Buffett. “You need integrity, intelligence and energy to succeed. Integrity is totally a matter of choice — and it is habit-forming.”

16. Develop a Clear Vision–and Stick to It. – From the beginning, Bill Gates dreamed of developing Microsoft into a corporate giant. For CEOs this is one of the most important traits that MUST be part of the toolbox.

CEOs need to clearly identify to themselves and communicate to the environment that they work in ‘the vision’ that they have set out to achieve. They then need to have the confidence to deliver that vision.

17. Hire ‘Action’ oriented employees. – CEOs usually have exposure to many different environments and come across many employees. Some will be better than others, while some will be outstanding. Gates has always hired the smartest people who can ‘get the job done.’

18. ‘Stop’ the ‘mad bureaucracy’ – I have mentioned this before in a post (can’t think of which one though) and it gets reiterated by Microsoft. As Matt said, ‘The plague of most big companies is bureaucracy and stupid rules. Thielen gives the example of an un-named high-tech company that sent a four-page memo to all of its employees on proper security badge procedure, including infinitesimal details on how and where to wear the badge.

To that, Thielen states, “Does Microsoft manage to avoid this type of inane garbage? By and large, yes.” Unlike most companies, Microsoft actually assumes its employees are smart. Rules at Microsoft are few and far between, and the ones that exist tend to make sense. Having only a few important, logical rules means that employees actually remember and follow them.

19. Annual rating of performance

This is an area of Dr Deming’s theories that I do not have to adjust for CEOs. The annual rating of performance is an arbitrary and unjust system that demoralises employees and nourishes short term performance. It has an added side effect as it annihilates team work and encourages fear.

This annual rating of salaried people is also called the Merit system, annual appraisal and management by objective – management by fear is a better term. This system works by rewarding employees for what they have done in the past year, i.e. performance pay. The effect is devastating as the employee must have something to show and this in turn nourishes short term performance and annihilates long term planning and team work. As each employee is encouraged, to show and prove their individual contribution to qualify for the performance pay, it stifles team working. Even if individuals are working productively as a team, inadvertently, they are identifying ways in which to use the team work to justify that all important, performance pay!

Dr Deming’s theory encourages teamwork in its true sense. Actively listen to other team members’ views and ideas and counter members’ weaknesses while using the strengths of the team. This is impossible under a merit rating.

Even more damaging is the fact that when ratings are given out they cannot be understand well enough by employees and as to why they were not rated high enough.

It would be better if this system was a lottery where at least there is a good reason not to understand better, as employees would not feel superior or inferior.

20. Mobility of management

The annual rating of performance encourages mobility of management. As employees are not getting a raise, they are not loyal anymore. This has a devastating effect on the business as people have no roots in the company and are not there long enough to understand the business well enough. Management requires good knowledge of the company, its problems, production and service capabilities and that takes a long time.

For example, if a project manager has just arrived at the business and does not understand its culture, overview of its IT systems, IT and business strategy and is made to work on an individual project, how can he/she understand the overall  impact of what it is they are delivering?

21. Use of visible figures only

Most businesses will use figures that are known, for example, service desk figures. This is because most business schools and graduate degrees encourage us to use these figures. The power is in knowing known, unknown and the unknowable.

Now, the question some of you may ask is that, if it is unknown, how could it be important? Well, we need to understand the multiplying effect of a happy customer and also the unhappy one. Understanding these figures is absolutely crucial for all departments, as just with the given example, if we can understand the multiplying effect, we can harness the effect and turn the unhappy customers into ambassadors within the business.

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