Opportunity

Opportunity

The world abounds in opportunities, large and small. We are still waiting for a cure for cancer, tasty nonfattening foods, weight-loss schemes that work, and flying cars to avoid congested roads. While waiting, we can focus on trying to make our present products and services better in a hundred ways.

Look for problems. People complain about it being hard to sleep through the night, get rid of clutter in their homes, find an affordable vacation, trace their family origins, get rid of garden weeds, and so on. Each problem can spark several solutions. As the late John Gardner, founder of Common Cause, observed: “Every problem is a brilliantly disguised opportunity.”

Look for trends. Surely you can get some ideas from Faith Popcorn’s list of 16 trends, including cocooning, down-aging, and cashing out. Cocooning refers to people spending more time in their homes because the outside world is getting rough; therefore, think of ways to make the home more pleasant through furnishings, electronics, and entertainment.

Down-aging captures the fact that older people want to feel young; hence the explosion of wrinkle creams, plastic surgery, and Jaguar sales. And cashing out means that people want to lead a less hectic existence and seek simpler lifestyles and smaller towns.


Don’t just talk about opportunities. Success happens when preparation meets opportunity. A company has to either make history or become history. Someone compared market demand to a swiftly running stream: If you don’t throw your line in fast enough, you won’t catch the fish. Mark Twain learned this from bitter experience: “I was seldom able to see an opportunity until it had ceased to be one.”

One of the greatest opportunities today is to invent businesses that can charge significantly lower prices than competitors and still be profitable. This has been the secret of Wal-Mart, Southwest Airlines, IKEA, and Dollar General.

They reinvented their respective industries so as to be able to offer significantly lower prices than their competitors. Given the vast and growing number of low-income families, these retailers attracted millions of loyal customers.

Rosabeth Moss Kanter, in her When Giants Learn to Dance, observed: “The years ahead will be best for those who learn to balance dreams and discipline. The future will belong to those who embrace the potential of wider opportunities but recognize the realities of more constrained resources, and find new solutions that permit doing more with less.”

Said Ralph Waldo Emerson: “This time, like all times, is a great time if we but know what to do with it.”

Organization

Who should headquarters work for? The field people, of course. The job of headquarters is to help the field people be the very best they can be.

Robert Potter, past president of Monsanto Chemical Company, said: “The division managers pay for the headquarters services from their own budgets. If they think they’re paying too much for support staff, we simply eliminate the [headquarters] job.”

The sales department isn’t the whole company, but the whole company had better be the sales department. Not everyone in a company is a marketing manager, but everyone should be in marketing management.

This point is mentioned by Hiroyuki Takeuchi about Japanese companies: “Fifty percent of Japanese companies do not have a marketing department, and ninety percent have no special section for marketing research. The reason is that everyone is considered to be a marketing specialist.”


Companies are organized vertically, but processes are horizontal. This is the mismatch that reengineering hopes to correct by appointing cross-disciplinary teams to manage key processes.

Multidivisional companies tend to be product-oriented rather than industry- or customer-oriented. Yet the divisions may make products that go to the same industry or customer. Siemens recently developed a focus on four industries: hospitals, airports, stadiums, and university campuses.

Siemens has assigned for each industry a single senior-level manager to have authority and accountability to orchestrate interdivisional cooperation regarding each industry.

Outsourcing

Your company can be great at only a few things. For the other things, hire those who can do these things better. Outsourcing originally applied only to the company’s noncore activities, such as office cleaning and landscaping. But today’s mantra is that a company should outsource everything that other parties can do better or more cheaply.

Outsourcers are able to offer lower costs and better results because of their scale and specialization. Thus Nike decided not to manufacture its own shoes; Nike hires Asian firms that can produce shoes more cheaply and better.

Companies need to know which marketing activities to keep inhouse versus outsourcing them. They usually outsource advertising services and marketing research.

Some are now outsourcing direct mail services and telemarketing. A few are outsourcing new product development and a sales force. I know of companies that have outsourced their entire marketing department.




A company hired me to help management decide what to outsource. After examining all of their activities, I delivered a report to the board. “Gentlemen, you should outsource everything. You are not good at anything.” They were stunned. “Are you saying that we should go out of business?” “No,” I said. “I am telling you how to make more money. Your costs will go way down. The only competence you need is to manage outsourcers.” Essentially I was proposing that they become a virtual organization.

Yet a company may go too far in outsourcing. What makes a great company is that it has created a set of core competencies that link ingeniously and would be difficult to imitate in total. This is what companies such as IKEA, Wal-Mart, and Southwestern Airlines have done.

They have outsourced some activities, but what makes these companies great is they have reserved for themselves an interrelated set of competencies and capabilities that defy ready imitation.