What If Jack Welch Was Wrong?

“Blasphemy!  Heresy! Un-American! How do I unsubscribe from Client Centric Sales?”

Yeah, yeah, I hear you. In the world of big company management, Jack Welch is like a god. Who am I to question someone who is considered one of the greatest CEOs of all time?

We all know one of Welch’s most famous quotes:  “Be number 1 or number 2 in your market or get out.” There is a lot to say for that as a philosophy. Who wouldn’t want to be number 1 or number 2 in their industry. Market leaders usually have a great brand, great management, and a long list of references to help pave the way for the next sale.

What if you’re number 3?

Or number 4, or 5, or 27? Then what? Try as we might, sometimes we are stuck working for a company that is not dominant, selling a product that is in the middle of the pack, or providing a service that will never be more than above average. Whatever the circumstances (for example, family responsibilities keep you stuck in Kansas City when the real opportunity is in Chicago, you work for a family business while you wait for your father-in-law to retire so you can modernize the company, or an engineering team that can’t keep up with technology), there you are, lost in the crowd.

If you can’t be number 1 or number 2 in your market, and you can’t get out, you need to be creative – you need to create another market.

I’m not saying that if, for example, you sell building automation systems that you rename as “Energy Optimization Services” and then sit back and watch the sales role in. What I’m saying is that you can succeed with what you have if you are willing to be creative and change how you play the game.

I see a great example of this every weekend when I watch my son’s tennis matches. He is a high school sophomore but routinely beats high school seniors.  These kids are several years older, up to a foot taller, and much stronger. Stroke for stroke, they outhit him. But game for game, he outplays them. Instead of playing their game (to be number 1 or number 2 in high school tennis, you typically have to be a hard hitter – teenage testosterone pushes these kids to make every shot a “hero shot”), he plays his own game, consistently putting the ball just out of reach, keeping his opponent off balance, and watching their frustration grow. You could argue he doesn’t ever beat his opponents, but simply sets them up to defeat themselves.

Besides fatherly pride, why do I mention this? Because it is a good allegory for redefining your product or service. If you work for a small company that integrates software for different computer systems, you won’t be able to compete head-to-head with IBM when you are playing by their rules. But you can redefine what you are offering your prospect, how you are planning on adding value to their bottom line, or how you bring it to market.

Let’s stick with this example. IBM is a great company with infinite brand recognition, a wealth of resources, and a team of outstanding salespeople. They can make just about any computer-based system do anything their clients might want it to do. Let’s say that you work for a small company with only a handful of software engineers who can make Software X talk to Software Y while sharing data with Software Z, and that’s all.

How can you compete?

You can’t, if you play IBM’s game. So disrupt your market (or product, or service, or company, or delivery method).

The story of David and Goliath is often used in the business world.  When David took on Goliath, he was a simple shepherd who was too small to wear his brother’s military armor, and he knew he couldn’t take Goliath on his opponent’s terms. He looked at the strengths and weaknesses of his situation, and decided that his best shot (literally) was with a sling. David stayed out of Goliath’s reach, hit him in the forehead with a rock, and brought down the mighty giant.

Back to our original example, could our fictional company take on IBM by being so good at Software X, Y, and Z integration that our exclusivity is seen as a unique advantage? Could we rebrand our company as a “boutique integrator” who specializes in a very distinct way, or provides over-the-top service, or will make the prospect our company’s number one client who gets special attention?

There are lots of ways to disrupt your market, product, service, company, delivery method, or even yourself. Spend some time with trusted and progressive thinking colleagues to whiteboard out some ideas to redefine your market. Strive for uniqueness. Aim for boldness. I’ve seen companies go through remarkable and profitable transformations doing this.

Even those number 1 and number 2 companies need to do this occasionally. IBM had to redefine themselves when they were on the brink of disaster. In an amazing show of leadership brilliance, Lou Gerstner almost completely reinvented the company to save it. David took on Goliath and won. My son is undefeated this year. And with some effort, you can be number 3, 4, 5, or 27, and still take on number 1 or 2.

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2 Comments

  1. Nice advice, Mr. Turley. But I’d be interested to see how your advice plays out for an online retailer. I am one of 10,000+ online sellers of wine. We’re an industry with maybe 20 dominant players, with the rest of us squabbling over the “long tail remains”.

    Though I have defined my niche, (“I curate an ever-evolving portfolio of artisanal wine producers, appealing to wine lovers who enjoy discovering new favorites”), I am under-funded relative to the heavy hitters. Any ideas for leveraging our strengths?

    Reply
  2. You have picked a fun, but difficult vocation. The wine business is full of movie stars, industry moguls, and hobbyists, none of which seem overly concerned with turning a profit. These 20 dominant players are the Goliaths of your market. I like your website (www.davethewinemerchant.com), and after a quick look it seems to have more useful content than many of your major competitors. In fact, it is a good template for many other industries, not just the retail world.

    I’m sure your clients enjoy your expertise with wine, food pairings, recipes, plus your entertaining blog. Wine aficionados are presumably buying from you for these reasons, and less seasoned buyers most likely see you as a trusted advisor who can steer them through the complex world of wine. These are your strengths, but many of these attributes are also your competitor’s strengths as well. Your blog shows a unique personality, something that can’t be taken by a competing retailer.

    I’m betting that you can’t focus down even further and specialize in a certain kind of wine or a lessor known region – the market probably won’t support that. However, can you maintain your current model but also add a specialty practice to it? Do you have (or can you get) connections at the most prestigious wineries so as to secure a contract for some of their very high end specialty wines? Or perhaps find the very smallest wineries and offer them an exclusive distribution arrangement? Your food pairing advice and recipes are a unique strength – can you use that to collaborate with specialty online food retailers or a high end store? Linking your brand to others in the food industry might give you another angle on your market. Would a store chain like Whole Foods be interested in a small sign in the meat department next to selected items saying something like “Dave the Wine Merchant suggests ‘XYZ Vineyards Pinot Noir with this salmon” to help boost their wine sales, increase your brand awareness, and help customers make a good selection?

    I’m not an expert in the world of online retail wine sales, so these may not be practical ideas. But the theory holds true – find a few creative friends from outside your industry to help you see your business in a differently light. I know someone who helped a firewood company reposition themselves as an alternative energy company. All it took was an outsider looking in coupled with the founder’s industry expertise and a willingness to try disrupt an industry.

    Reply

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