Gary Hamel's Neighborhood
For all the talk of a global economy, your pocket can still be picked at home
© 1995 by Michael Finley
Gary Hamel is an expert on corporate strategy. Not strategy in the sense of strategic planning, which Hamel thinks is foolish and likens to making a map in the middle of an earthquake, but strategic thinking of the type that allows a company to reshape the industry it is in and dominate it in years to come.
It is this act of really looking at where a company is going, and developing a point of view about its future that will enable it to grow, that is missing among the neighborhood's misguided companies. It is not the familiar litany of external problems and solutions: reengineering, quality, productivity, global competition, etc.
It's the Japanese -- not
Take global competition -- please. Anyone off the street will tell you that the great challenge to U.S. corporations is the stiff wave of competition from Japan and Europe.
But consider the following companies, all of whom have slipped in market share in recent years, and ask yourself: was it foreign competition that did them in?
Kmart
IBM
DEC
US Air
The answer is that these companies have fallen off the wagon because of disastrous right here. Kmart was clobbered by Wal-Mart. IBM had its head handed to it by Intel, Microsoft, and Compaq, all of whom had drawn a bead on the future while IBM luxuriated in its mainframe profits. DEC was done in by its own bad judgment, and by the clever maneuvering of EDS. USAir's competition is a better-run, lower-cost domestic airline, Southwest.
For all the talk of a global economy, your pocket can still be picked right here in the neighborhood.
It isn't money, either
It's great to be capitalized, but undercapitalization is no excuse for failure. Richard Branson's Virgin Atlantic went from being a on-plane carrier to besting British Airways in the number of transatlantic passengers last year. Honda back in the 1960s took on the entire U.S. auto industry with only $100,000 marketing cash, a single salesman, and his sleeping bag -- and triumphed.
The sad truth is that the richest companies in the neighborhood spent the most money the most foolishly. The number of dollars you spend is much less important than how intelligently you spend them.
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Gary Hamel