Monday, August 20, 2012

Management Judo

Peter Drucker identified a common behavioral trait among established organizations. One that over time renders them competitively weaker and gives the alert company the opportunity to achieve increased market share through Management Judo—leveraging off of the competitor’s weaknesses for an advantage.  The weaknesses companies tend to develop over time include:

  • A “not invented here” (NIH) attitude that will make the company slow to take advantage of new technology, processes, or materials, etc.  
  • The “Creamer” will concentrate too long on the higher profit, upper end of the market leaving the door open for others to enter the market through the lower end.  
  • Failure to stay in touch with clients will result in the company emphasizing its idea of best  quality or features (Wrong Quality) leaving the customer’s real wants unsatisfied or the price too high.  
  • The “Premium Pricer” is the high price alternative and continues to maintain or even increase price in the face of equal or superior competitive alternatives.  
  • The “Maximizer” keeps adding features to satisfy marginal market elements leaving the door open for the niche company that will provide a simpler, lower cost product or service that only addresses the needs of a particular market segment.  

The marketplace is littered with the bones of those who died at the hands of competitive Management Judo.  It is important to understand that without constant management effort these weaknesses will develop.  For the excellence company that means that the opportunity to gain market share through Management Judo will arise repeatedly.  But perhaps even more importantly, you must recognize that the seeds of these five weaknesses are also within your organization.  They will develop and you will lose market share and eventually fail as a company unless you are continually making changes and altering course to counter their development.  Left unattended they will development.  They are part of the natural changes that pull an organization down.

The successful company must always be on guard against developing Drucker’s identified weaknesses and at the same time remain alert for opportunities it can take advantage of when its competitors fall into the behavioral trap identified by Drucker.

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