By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
I sat through a meeting a couple of months ago wanting to scream in agony, but knowing that I could not really blame the participants for what I was hearing. This meeting simply pointed out the misery of most businesses when they think about how they might strategically create growth.
The context of the meeting was this: I had been hired to help them find new ways to grow, because they were continually finding themselves losing to “stronger” competitors, especially one key competitor. What I knew was that their competitors were not strong at all, but rather they were just as confused as this team. The only difference was a history of one of those competitors being the lead dog (not the controlling Alpha, but at least the name that everyone knew).
The men and women around this conference room table were desperately trying to figure out what they could do to become “the Alpha.” It wasn’t happening, because every time I pointed out the path that had been clearly defined by some research I had done for them (and they had witnessed to the point of actually hearing people say they would change their behaviors if they were offered these solutions), they immediately dropped back into their “following” mindset and believed that they could not get there. They believed that the bar that the “lead” competitor had set was too high for them to hurdle.
The final straw came when we started talking about pricing strategy based upon the research findings. All through the discussion, they kept referring to this one competitor’s price as being the one they had to “compete” against. They saw that as needing to be below it. This was despite the fact that they claimed their product was superior in every way to this competitor’s product.
I gave them an alternative that was clearly supported by the research: Someone could easily take a price position 5% to 10% ABOVE this competitor and make themselves the new leader that everyone would look toward. I could count the heartbeats. The fear in their eyes clouded the entire room. They said their product was better. They said they wanted to take a leading role. But when it really came down to pushing the button, they just could not believe that they could do it.
That company is still sitting there with a “superior” product, unable to take the step to prove it to customers with a price that proves its worth. They have come no closer to becoming an Alpha than they were two years ago.
Sadly, this is all too common. We set our own limitations. It’s what makes an Alpha capable of controlling an entire category with just a few well-thought-out strategic moves. People and companies convince themselves that they must follow someone’s lead, even though their own demise is driven in that following.
Even as you read this, the very financial whizzes responsible for the subprime fiasco and global credit crisis, just the most recent on a long list of financial screw-ups, are lobbying Congress forpermission to buy and manage your pension fund.
“A broad coalition of Wall Street firms, from banks and insurers to hedge funds and private equity firms, are pushing lawmakers to let them buy and manage so-called frozen corporate pension plans, which no longer accept new members but must continue to cover current ones. Of the $2.3 trillion in U.S. corporate pension fund assets, some $500 billion sits in frozen plans, including those of big companies such as IBM, Hewlett-Packard, Verizon, and Alcoa.”
In an UN-surprising move the Treasury Department approved the idea; fortunately the IRS ruled that the plan would require legislative approval (and you thought the IRS wasn’t your friend).
Hilariously, Treasury “offered a blueprint for lawmakers to allow “financially strong entities in well-regulated sectors” to acquire pension plans. Now the debate moves to Congress, which would have to change existing law.”
Knowing who those “financially strong entities” are will really increase your warm and fuzzy feelings—they include Aon Consulting, Citigroup, Morgan Stanley, Prudential Financial, Cerberus Capital Management, and, to raise the level from hilarious to hysterical, consider that “JPMorgan’s newest property, Bear Stearns, was among the first to lobby Congress and regulators. It started last year, just as two of its hedge funds were imploding.”
But your friends on Wall Street are drooling over all the zeros in the potential fees. “…McKinsey & Co. predicts that the assets in frozen plans will more than triple, to $1.7 trillion, by 2012. By taking over frozen plans, Wall Street firms could charge fees based on the total assets, perhaps in line with the standard 1% to 2% levied by many money managers.”
Charles Millard, the current director of the Pension Benefit Guaranty Corp loves the plan, as does Former PBGC Director Bradley D. Belt, a GW Bush appointee and former top aid to John McCain, “who two years ago teamed up with private equity firm Reservoir Capital Group to form Palisades Capital Advisors, a pension advisory firm,” and thinks that the little guys like him should be able to play, too.
As to the thoughts of the opposition, “Critics, including some on Capitol Hill, worry that financial firms won’t always have workers’ best interests at heart…”
Anyone who’s been around even one block knows that the road to success is paved with people who know more and are smarter than you. But knowing isn’t accepting.
Dan McCarthy did a great post called Captain Kirk and Leadership that spells this out. It’s too good to paraphrase, so click on over and read it.
He also pointed me to a video that I’m posting here for you. Take the time to watch, it could change your life.
If you’re the worrying kind, there’s a lot of serious stuff going on in the world to worry you and much of it involves people dying. But in spite of all that, people still find time to fret over the idiotic.
And there’s plenty of idiocy around for the fretting.
According to Dimitris Lambrou, “…international dominance of the word in its sexual context violates the human rights of the islanders, and disgraces them around the world.”
Seems that there’s a small Greek Island named Lesbos and the inhabitants are called Lesbians.
“The term lesbian originated from the poet Sappho, who was a native of Lesbos.
Sappho expressed her love of other women in poetry written during the 7th Century BC.
But according to Mr Lambrou, new historical research has discovered that Sappho had a family, and committed suicide for the love of a man.”
Now, over the years I’ve had friends of every possible gender proclivity and I’m here to tell you that the suicide proves nothing.
Obviously, the only course open to Lambrou and his followers was to sue for an “…injunction against the Homosexual and Lesbian Community of Greece and to order it to change its name,” which they did this spring.
“The court ruled that the word lesbian in its adopted Greek and international sexual context does not offend or threaten the individual, collective or human rights of the island’s residents.”
That didn’t please Lambrou, who has promised to keep fighting.
“It is a misguided ruling, so we have decided to take the matter to the highest courts both in Greece and Europe.”
Amazing, isn’t it? In a world facing wars, famine, global climate change, and all kinds of human-induced nastiness, people still have the time, interest and energy to pursue the ridiculous.
Chapter four from IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy) is about extreme innovation, AKA, serious disruption.
Innovative products and services aren’t enough any more.
“As one U.S. CEO explained, “We’re starting to think about things we couldn’t do before.” With the Internet, businesses can now find niche markets for rare, surplus or highly specialized goods — a virtual “garage sale,” as it’s often called. Business processes, as well as some products and services, are becoming more virtual. New delivery channels and electronic methods of distribution are overturning traditional industry conventions. And these advances are not just changing the way individual companies work — they’re creating entirely new industries.”
So what exactly is happening? Is there a direction that the majority believe will work?
“Among those making extensive changes to their business models, enterprise model innovation is the dominant choice. Forty-four percent of CEO s are focused solely on enterprise model innovation or are implementing it in combination with other forms of business model innovation. This trend toward enterprise model innovation is even more pronounced in emerging economies (53 percent).”
What does ‘enterprise model innovation’ mean? It refers to the challenge of offering your customers something truly different all by yourself—a business model that is fast dying in a world of speedy global connections, sophisticated, interconnected consumers and breathtaking speed of change.
“While 38 percent of CEO s plan to keep work within their organizations, 71 percent — nearly twice as many — plan to focus on collaboration and partnerships.“
And the most important point, as pointed out by one Australian CEO, “It’s about deciding when to collaborate, whom to involve, how to lessen the destructive force of competition.”
More on this next Saturday.
Is your company involved in enterprise model innovation?
Change must be presented intelligently, i.e., in ways that the people involved see the change as positive (for themselves).
This is the overt side of change that at its best addresses both the right and left side of your brain.
But what about the covert side of your brain—the part ruled by habit?
Anybody who has ended a habit, such as smoking, or modified an unconscious characteristic, such as rapid speaking, knows just how difficult it is to change/modify things of which you’re not even aware.
It is this covert side that makes change so difficult.
Any major action or situation has dozens of tiny associated habits and every one of them needs to change or, at least, be modified, because habits are never really broken—they are replaced.
For example, it is the hundreds of covert habits that make changing jobs so traumatic. On top of all the biggies—new company/culture/job/boss/colleagues—are the minutiae of functioning—route to work/parking/mass transit/restrooms/eating/etc.—this list is far longer than the overt list—and far more ignored.
Whether you are leading change or changing yourself, ignoring the covert side will always imperil success.
What’s your approach to the convert side of change?
How time flies. I may be slow, but eventually I get there.
My good buddy KG Charles-Harris sent this to me last spring, he found the information both useful and amusing and thought I should pass it on. As I’m finally doing.
When hiring a manager, the author says to “chuck out all the psychometric tests and references that reveal so little and go for the “nanny test” instead,” adding the caveat that the test only works on people who had/have nannies.
“Managing a nanny is management at its most extreme. The stakes are gigantic: getting someone else to look after our children is the biggest act of delegation that any of us ever does. You need to find someone good, you need to get them to stay, and you need to keep them happy. This isn’t easy in a job that is poorly paid, has no career progression and involves much wiping of bottoms.”
Sadly, the description in the last sentence describes many jobs in industry. Sometimes it’s actually the job, but more often it’s the way you end up feeling after doing it for a while.
So the writer called the nanny she had employed for 15 years and asked for a review.
“I had hoped she would mention my skills as a mentor, friend, team player,” instead, the nanny said, “I think the reason I stayed with you all those years was your total lack of involvement.”
First reaction were hurt feelings, “But then I thought about it and realised she was quite right. Indeed, in a couple of seconds, my nanny test had told me something about myself as a leader. Not only do I not micro-manage, I don’t macro-manage either. I recruited someone I trusted with my children’s lives and I let her get on with it.”
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Even as you read this, the very financial whizzes responsible for the subprime fiasco and global credit crisis, just the most recent on a long list of financial screw-ups, are lobbying Congress for 
Chapter four from IBM’s 
The common word is that people hate change; then there’s the school that says it’s not change, but 
