Peter Cohan | Inc.com contributor
Want to stay ahead of the curve? Here are some simple reminders for what it takes to be better than the rest.
Corbis
You've probably heard by now that Dell has announced it
will go private with CEO Michael Dell maintaining a majority interest
with minority shareholders including Silver Lake Partners and Microsoft.
To better understand the news (and most importantly, what
you can learn), you have to understand a bit about the company's
history.
In the 1990s, businesses were buying PCs. Dell was
competing with companies such as Compaq that sold PCs through retailers.
But Dell sold directly to companies using its website. This meant that
Dell did not have to include the cost of the retail channel in its
prices, according to the Harvard Business School case, Matching Dell,
that I used to teach. This was just one of the many advantages the
company during this time, which inabled Dell to charge higher prices and
make PCs at a lower than industry-average cost.
But the collapse of the dot-com bubble meant that
companies stopped buying so many PCs. In the 2000s, the biggest PC
consumers were individuals who wanted to see machines operating in
retail stores before buying them.
While Dell is taking measures to move the company forward,
it's a good reminder that start-ups need to keep a competitive edge.
Here's how:
1. Maintain a healthy paranoia. If you want to keep
your company growing, you must maintain a healthy paranoia. This means
that you should maintain fear that forces outside your control could
sink your company. It should not be that hard for you to stay
scared--because all your employees, investors, and customers are
depending on you to keep the company growing.
Sorry to say, maintaining that healthy paranoia must be
something you must live with and show to your people every day. If you
stay scared, you must share that fear with your staff and make sure that
they are always on the lookout for ways to change the company so it can
sustain its growth.
2. View your company from the customer’s perspective. One
way to do that is to look at your company from the customer’s
perspective. This means that you should pretend you are a customer and
shop from your company and your competitors. Knowing what customers want
when they buy your industry’s product, you should take careful note of
whether your company is not winning the battle for value creation.
And if you are falling behind, change your company so it
gets back in the lead. That means stripping out annoying processes that
make the customer want to fire you. And if your product does not have
the features that customers want or your price is too high--find a way
to fix those problems.
3. Imagine that the board fired you and brought in a new CEO. If you have a strong board, it should be asking whether you are still the right person to run the company.
In 1984, Intel’s CEO, Andy Grove, was losing ground to
Japanese memory chip makers. He thought about what a new CEO would do if
the board fired him and put in someone new. The answer was to get out
of the memory business and start making central processing units.
Rather than quit, Grove changed strategy - thus Intel got
the benefit of new thinking without losing Grove’s managerial talent.
And Intel went from nearly perishing to decades of CPU industry
leadership.
4. Change everything to stay ahead of the pack. If
the customer changes, your company must reinvent itself to keep up with
the changing customer’s needs. You must be able to track how customers
are changing and what competitors are offering those customers.
If you can give customers a new offering that puts your
company ahead of the value curve, you will be able to sustain your
leadership.
SOURCE: www.inc.com
No comments:
Post a Comment