What you believe about your company says a lot about you
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True story: Last month, I interviewed the domestic heads of two monitor companies aiming for market-share gains in 2005. Two guys, two days apart. One guy's company makes displays and only displays, while the other has displays and plenty else. Think printers and other peripherals. Now, here's the part that slayed me. What, I asked of the first guy, do you think is your distinct, competitive advantage over your rivals? He said it's his company's "dedicated and devoted focus on the display market." Then I asked the same question of the latter subject. His response: "The fact that we compete in more than just displays gives us insights into many markets and really helps us create devices that fit into total solutions."
Never mind that it's simply not possible both sentiments can be true simultaneously. The fact that some people unquestionably believe that their company's point of view is the truth explains a lot about how companies think. Right now, IBM is very proud of the fact that it is "consistent" and "predictable." Conversely, companies like, say, Sun, are equally proud of the fact that changes under way there express how "innovative," if not "revolutionary," the company can be.
Truth be told, far too many companies believe they have an advantage over their rivals by simple virtue of what they have lying around. By that I mean what they happen to have in terms of corporate structure, strategy, product portfolio, distribution pipeline and even executive management--most of which was probably cobbled together in no strategic fashion during the course of the past decade's worth of decision making.
The aforementioned peripherals company, for example, truly believes that having displays, printers and other devices is a real advantage, despite the fact that half its product family came from a convoluted strategic alliance and its entire corporate strategy was sewn together as executives came and went. The upside of its strategy: There's potential for upselling and cross-selling of both VARs and customers, synergies in engineering and economies of scale when it comes to manufacturing and parts sourcing. But this company, at least publicly, doesn't acknowledge its downsides, which, in this case, is many more distractions for executive management, lots more corporate complexity and exposure to risk in more than one commodity market.
Failure to acknowledge the downside, or even the flip side, of one's strategy is a major problem because, as we all know, things change in IT America. Executives come and go, mergers and acquisitions occur and "current thinking" simply gives way to "more up-to-date, current thinking." For those completely wedded to one way of thinking, a major strategy change is more than disruptive--it's earth-shattering. That's why corporate skeptics actually have an advantage over the true believers in business today. Not being committed to any one ideology or strategy, they tend to survive mergers, bankruptcies and executive management shake-ups better than true believers. Of course, skeptics rarely get as far in Corporate America as true believers do.
That said, I do wonder if some of the people running companies today are cynics at heart. At the very least, I wonder how many pine for having what their rivals possess. One guy I know who runs a computer company based in Asia is getting awfully tired of flying back and forth to the Far East every quarter. The trips are becoming wearying and distracting. And the micro-managing he endures is stifling. Still, whenever he's in corporate mode, he touts the advantages of being part of one of the world's largest corporate conglomerates. Secretly, I wonder if he wouldn't be better off running a locally owned company that keeps its money in dollars and whose manufacturing plants don't require connecting through Hong Kong.
Closer to home, distributors including Avnet spin the fact that they sell to both end users and VARs as a distinct advantage. They better understand the entire supply chain and are better able to appreciate just what goes into end-user customer satisfaction, they say. Conversely, channel-only Arrow says its advantage over its rivals is that it doesn't compete with the very companies that it sells to. Both Arrow and Avnet are performing well, so it's tough to say who is right in this case.
One thing I have learned: The person with the simplest message is right more often than the person whose message is more complicated. That's my story now; it could change, of course, if simplicity falls out of favor and diversification again becomes all the rage. Guess that makes me more of a skeptic than a true believer. What about you?
T.C. Doyle is senior executive editor at VARBusiness. You can reach him at firstname.lastname@example.org.