Military wisdom says “generals fight the last war.”
It’s true, because doctrine is based on how things were done in the last conflict, not the current one. Casualties happen before the generals realize what they think should be happening isn’t what is really happening.
Football coaches say “no game plan lasts beyond kickoff.” A winning game plan is determined by the coach who’s better at adapting to adjust to what is rather than what they wish it were.
It’s not a lot different in business. Instead of fixating on trends, statistics, and historical returns, business leaders need to think more like migratory hunters than generals.
Their job is to track down and bag that most elusive of quarry: the customer. And they’re a free-ranging group.
If you ask some business leaders who their customers are, you’re apt to get some sort of grandiose elevator statement about “those who aspire to the highest levels of blah, blah, blah...”
The most astute negotiator and businessman I’ve ever met was asked who his customer was. His unhesitatingly answer surprised everyone: “anyone with money.”
Sounds simplistic, but it’s the most elemental truth of business. Ultimately, your customer is anyone who wants to buy something you’re selling.
Everyone else is in the way.
Monday’s feature got a lot of response.
Particularly the distributors closing their doors. One reader who makes his living in another industry addressed the idea of the potential disappearance of the distributor-based system.
“We make Ice Cream Cabinets, and compete the world over,” he wrote, “we have been dealing with this for the past 15 years, ever since email and the internet made if possible for customers to communicate quickly and with details about what they were buying.”
“We survive by keeping our eye on the customer,” he continued, “the customer being the actual user of the product, not the distributor who handles the distribution. I find old-school businesses fail to broaden their definition of ‘the customer’ and want to hang onto the old school way: the customer is the one I invoice.”
“That reality was then,” he concluded, “today, I market to the user. We sell direct, via distributors and buying groups.”
Here’s where he hit on the point that I think is important: “Each makes money on value added -or not.”
As he observed, no matter what you’re selling, you’d better not lose sight of the ultimate customer- the user.
He concluded with this observation: “The three-tier distribution system isn’t dead- just changing...to some, a drastic change.”
Another longtime reader wasn’t hesitant in his criticism. “Interesting editorial today. It’s after action evidence of the lack of financial and strategic acumen of an industry that thought disruption could never occur.”
“Capitalism,” he wrote, “doesn’t need the Second Amendment. Many folks have a hard time accepting that fact.”
A third response took exception with one distributor’s assertion that “the marketplace has changed such that we are no longer able to make a positive return on our investment” by referencing a Forbes magazine article entitled “Businesses Don’t Fail-Leaders Do.”
In that referenced work, author and business consultant Mike Myatt made the case that “If you’re willing to strip away all the excuses, explanations, rationalizations, and justifications for business failures, and be really honest in your analysis, you’ll find only one plausible reason- poor leadership.”
He goes on to cite poor execution, flawed strategies, under-capitalization, and generally poor overall management as other causes of failure. A lack of sales was one factor, but Myatt dismissed that as a lack of leadership “in regards to strategic pricing, positioning, branding, distributing, compensation” or “any other series of metrics tied to sales force productivity.” (Editor’s Note: read the entire piece yourself at www.forbes.com/sites/mike Mynatt/2012/01/12/businesses-don’t-fail-leaders-do/amp/)
While I might cringe at the assertion that poor management is to blame for everything in business, he’s more right than wrong. Leading a business, whether you’re talking mega-corporations or roadside stands offering homegrown produce, begins with having some idea where you want to go. If you’re fixated on “making your numbers” and ignoring what your customers are telling you they want (either directly or via their buying from others), you’re not running performance numbers, you’re calculating your burn rate to oblivion.
Having been a business reporter for a long time, I have spoken with many of the best-known business leaders of the past half-century. Vastly different personalities have accomplished great things -in the same job. Some led by example, others by edict, some by force of personality, one even told me he led “by volume” (he was quite a screamer).
They all shared a common trait: they could clearly (sometimes bluntly) share exactly where they saw their business heading. And they weren’t the least bit reluctant to change course if necessary.
They all didn’t get there by the same means, but they weren’t fundamentally different from today’s automobile navigation system. When setting its parameters, you’re expected to enter your preferred routing. Navigation, from that point, is based on your preferences (fastest, most scenic, least traffic or whatever).
Different approaches, but all sharing the same ultimate destination. Just like business.
Today’s self-driving cars have made if tragically obvious, that even after you clearly state your destination, you’d still better keep your eyes on the road and hands on the wheel. After all, you’re ultimately in charge -like the head of a business.
Auto-pilot doesn’t mean pilotless. That’s true in flying, driving, or business.
And none of this is newfound knowledge. In fact, the earliest reference to leadership comes from a book written centuries ago. The message is simple, but the implication is profound:
“Without vision, the people perish.”
The reference is Proverbs 29:18 - from the Bible. At one point our leaders considered this the definitive handbook for personal conduct, governance, and business. Some things have changed, but not all for the better.
We’ll keep you posted.
—Jim Shepherd
