Essays

Champions and Lotteries

We (correctly) say that betting on a champion is a good strategy even though the strategy occasionally fails, and that betting on a lottery is a bad strategy even though it occasionally succeeds. How can we tell the difference between a champion and a lottery when it comes to something as fuzzy and complex as competitive strategy? Based on the robust population of management gurus, the profusion of transformative processes with cool acronyms, and the continued existence of disappointing results, it’s apparently not so simple.

The Rules

When the rules change, there is both opportunity and danger. Opportunity to those businesses that capitalize on the changes quickly, and danger to those that lag behind. Opportunity to those people who recognize the changes quickly, and danger to those who deny, resist, or ignore. Of course, that assumes that there are rules in the first place, and that they change.

Monsters

We believe that our competitors are gratuitously aggressive, unprincipled thugs dedicated to our destruction, and generally evil. We, on the other hand, are gracious model citizens dedicated to peace and prosperity, and generally benevolent. We (the good guys) are fundamentally different from them (the monsters).

Urgency and Creativity

It is hard to change preconceptions, tradition, and convention. It is especially hard to change them when our mental and managerial infrastructure reinforces the status quo. It’s worth it, though, because new ideas are the source of competitive advantage. Assuming, of course, that the new ideas are good.

Precision In, Garbage Out

We often use the phrase garbage in, garbage out when we work with spreadsheets, forecasts, market research, and the like. “Garbage” usually means we don’t trust the numbers we feed in. We certainly share the reader’s fondness for good numbers. There’s more to it than good numbers, though. Precision in produces garbage out when we crunch good numbers badly. “The computer made me do it” doesn’t feel very satisfying.

Feeling is Believing

We could have, we should have. We didn’t. If we spent one-tenth the energy on preparation, protection, and prevention that we spend on repair, blame, and fear, we’d live safer, more-prosperous lives. But we don’t. What will it take for us to do better?