Simple Truths: Leapfrogging the Competition

r a f og G i N g e P L the COMPETITION 9 Proven Ways to Unleash Change and Innovation

Mac Anderson | John J. Murphy

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Copyright © 2016 by Mac Anderson and John J. Murphy Cover and internal design © 2016 by Sourcebooks, Inc. Sourcebooks, the colophon, and Simple Truths are registered trademarks of Sourcebooks, Inc. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems—­except in the case of brief quotations embodied in critical articles or reviews—­without permission in writing from its publisher, Sourcebooks, Inc. Excerpt from Dare to Serve reprinted with permission of the publisher. Berrett-­Koehler Publishers, Inc., San Francisco, CA. All rights reserved. www.bkconnection.com. Copyright © 2015 by Cheryl Bachelder.

All brand names and product names used in this book are trademarks, registered trademarks, or trade names of their respective holders. Sourcebooks, Inc., is not associated with any product or vendor in this book.

Photo Credits Internals: pages 2–3, Rawpixel/Shutterstock; page 11, Sfio Cracho/Shutterstock; page 18, Pressmaster/ Shutterstock; page 59, g-stockstudio/Shutterstock; page 67, YanLev/Shutterstock; page 92, Rawpixel/ Shutterstock; pages 102–103, Iakov Kalinin/Shutterstock.

Published by Simple Truths, an imprint of Sourcebooks, Inc. P.O. Box 4410, Naperville, Illinois 60567-­4410 (630) 961-­3900 Fax: (630) 961-­2168 www.sourcebooks.com Printed and bound in China.

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“The beginning of success is realizing that the way it is now is not the way it has to be.”

—Napoleon Hill

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Contents Introduction: Leapfrogging the Competition

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1: Know Your Market and Customer

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2: Know Your Competition and Limitations

25

3: Simplify Your Mission

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4: Think Serve, Not Lead

43

5: Your Customers Must Come Second— Make Every Hire Count

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6: Strive for Excellence—­Always!

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7: Measure Results and Hold People Accountable

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8: Reinforce Core Values

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9: Embrace Change and Innovation

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About the Authors

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“Only those who will risk going too far can possibly find out how far one can go.”

—­T. S. Eliot

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Introduction: Leapfrogging the Competition Winning in the long run requires more than talent, money, and resources—­especially when the competition gets really tough and the playing field is continuously changing. Yesterday’s best practices might be obsolete today, not unlike a fax machine or a floppy disk.

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The upside to all of this change is fascinating—­for the entre-

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preneur and innovator. The sweet smell of opportunity and success is captivating. However, it might be terrifying for the play-­it-­safe manager or middleman.

The purpose of this book is to help answer the questions Why do some companies succeed greatly while others in the same field stagnate? and, more importantly, What can we do about it now to reduce risk and avoid failure? These are not always simple questions to answer; however, there are common denominators that will help to answer the “why” behind leapfrogging the competition.

I’ve been an entrepreneur for the last forty years. I’ve been fortunate to have launched three different start-­ups, each becoming a leader in its niche. As you might imagine, there were a lot of peaks and valleys along the way and even a near-­death experience.

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To help me explore the answers to the common denominators behind leapfrogging the competition, I recruited John Murphy, one of my favorite business authors. While I have enjoyed the real-­life spent his adult life coaching hundreds of well-­known companies on how to become all they can be through his firm Venture Management Consultants. He’s seen it all—­the good, the bad, and the ugly. Combining our collective experiences and drawing from the wisdom of others will help us to uncover the “whys” behind those who succeed and the companies that fade into oblivion.

We all know the world is changing at a rapid pace. What are the things you can do to get the edge on your competition to ensure long-­term success? This book is not about everything you need to

Introduction: Leapfrogging the Competition

experience of being in the trenches as an entrepreneur, John has

know but what John and I feel are the most important things.

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Remember, leapfrogging the competition isn’t just about also about leapfrogging your own resistance to change. Sometimes it’s best to make the change, not manage it.

Take the leap. Get out in front. The view is terrific, and there’s a lot less traffic.

All the best,

Mac Anderson Founder, Simple Truths and Successories

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outsmarting the external forces against you and your business: it is

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1

“Any intelligent fool can make things bigger and more complex.

It takes a touch of genius—­and a lot of courage—­to move in the opposite direction.”

—­Albert Einstein

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Know Your Market and Customer Rule number one in any successful business is to know who is paying you and precisely what they are paying you for. Without a crystal clear understanding of value in the eyes of the customer, non-value-­added activity and waste will inevitably creep into every process, practice, and function in the business. Intelligent, motivated, and well-­intentioned people will come up with ideas and procedures to make their work easier and more efficient without linking it to the bigger picture—­the end user!

They will add steps, meetings, reports, tools, metrics,

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and complexity to the business without ever really considering who

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wants to pay for it.

To leapfrog the competition and truly wow the people paying you for your efforts, it is absolutely essential to understand how everything you do fits into the bigger picture. Isolated, independent activity, even with the most positive intentions and logic, can silently and subtly rob us blind. It is, in many cases, our greatest form of competition—­our own creation of wasted time and activity. It is like Walt Kelly wrote in Pogo: “We have met the enemy, and he is us.”

Smart business leaders also learn to understand the mystery and power of paradox hidden within many global best practices. It is uncovering this mystery of paradox that allows astute business leaders to “get it” when so many others do not.

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HERE ARE SOME EXAMPLES OF THE MYSTERY OF PARADOX: 1. We know how to work less and accomplish more.

2. We know how to go slower and move faster.

3. We know how to sell more with fewer salespeople

and efforts.

4. We know how to get customers to chase us!

5. We know how to communicate more effectively,

often without saying a word.

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Mysteries such as these help us to leverage our talent, prioritize

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our efforts, and manage our time in optimal ways.

Of course, the referee in all of this is the market—­the ultimate playing field.

To be truly successful, we need to know what the market wants, needs, and values—­sometimes before the market has even figured this out. Great innovators recognize that the customer is not always right, another paradox. Henry Ford once said that if he had asked his customers what they wanted, they would have said a faster horse. Steve Jobs never would have offered us an iPod or an iPad if he had waited for customers to ask for one.

Instead, these clever business leaders uncovered latent market needs and customer desires before anyone asked. There is no

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more powerful way to leapfrog your competition than to offer something of value to the market that no one else has yet provided.

Getting there first is the name of the game among great innovators and transformational leaders. Just ask companies like Blockbuster, more. The only problem is that there is no one left to ask; these companies were outsmarted.

Clever entrepreneurs and business leaders recognize that smart businesses work backward to some extent—­another counterintuitive paradigm shift that many people find confusing. A shift in perception or application (like an entirely new business model or transformational technology) can set all competitors back to zero.

Know Your Market and Customer

Borders Books, Circuit City, Kodak, Smith-­Corona, and hundreds

Just look at what companies like Amazon, Google, Uber, Tesla, Square, PayPal, Pandora, YouTube, and so many others are doing to the competition. These disruptive companies are transforming the world by challenging the underlying assumptions driving many 17

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business models and setting new expectations. In addition to the common practice of focusing inwardly on departmental efficiencies and productivities, they are starting with the end in mind and linking everything they do to the ultimate goal in any business: your customers start selling your brand for you through positive word of mouth, you are well on your way to significant growth and prosperity. You walk the walk and let others talk the talk.

In a recent kaizen event, John encouraged his client to include an actual customer in the event. In past improvement efforts, this client had not considered this option. Instead, they were using common tools like Net Promoter Score (NPS) surveys, customer

Know Your Market and Customer

creating customer advocates and promoters in the market. When

complaints, and other lagging indicators to evaluate performance. So this was a shift in thinking and a very different approach. Another shift in thinking was to invite a detractor rather than someone who would recommend no change.

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The invited customer was very unhappy and gladly revealed

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why she was a detractor. She showed the team her supplier auditing process and the three critical metrics she used to evaluate performance. The team quickly realized that their company was failing in all three areas. This was takeaway number one. Takeaway number two was that of the thirty-­three internal metrics the company was using to evaluate their performance, not one of the customer’s three metrics were included. Wow! This was an enlightening moment of truth for the team, which immediately led to several rapid changes aligning expectations, priorities, and practices with the expectations of the customer—­a company with 80,000 employees and significant revenue. This customer also was getting ready to say good-­bye to the client.

Six weeks later, the client was scoring high on all three indicators, and the customer had shifted from a detractor to a

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promoter. She also attended the next two kaizen events to help take performance to an even higher level.

is critical to growing your business and outsmarting your competition.

Be wise.

Beware.

Start with the END in mind!

Know Your Market and Customer

Knowing your market and your customers

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CHECKLIST FOR SUCCESS ✓✓ Know what the market needs, and have the research to back it up. ✓✓ Understand your customers as well as, if not better than, they know themselves. ✓✓ Know your customers’ customers. ✓✓ Research your customers’ problems, needs, and concerns. ✓✓ Invite your customers to participate in product and process improvements.

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✓✓ Find ways to know immediately if there is a problem with a customer, and act quickly to resolve it at the root cause level. ✓✓ Align your value proposition with what the market and customers want and are willing to pay for. There is no doubt about who is paying your company and exactly what they are paying you for. This gives your company clarity of vision, focus, prioritization, and alignment.

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