I believe the speed and accuracy of the flow of information is the greatest competitive advantage available in the business world today. Without it, any business acumen competency is worthless.
Stories from three of our clients come to mind:
- A US medical products manufacturer based its Chinese factory production orders on the previous year’s demand. By the time the planners heard from the salespeople that demand for the old product had collapsed because of innovations in the marketplace, container-loads of unsalable product had already been produced and were on their way across the Pacific.
- In the 1980s, in the days of telephone landlines, Bell Labs was focused on the wonders that the cell phone revolution was going to bring. They ignored the pleas of their sales force in China who still needed public pay phones throughout the rural areas. These phones didn’t need bells and whistles – they just had to be sturdy enough to withstand temperatures of -50F to +120F (-45C to +50C), and they had to be cheap enough that so many of them could be installed that people only had to walk 3 miles instead of 10 miles to use one.
- Hewlett Packard’s view of the world is typical of high tech industries: you have to plan today for a product which you will bring to market in 5 years. You don’t know what you will be able to sell it for, or how large the market will be. You only know it will cost you $10 billion to do this, and you will have an 18-month window to sell it before it is obsolete.
In each of these cases, good results require a rapid and accurate flow of information. We teach the value of this in Income/Outcome – it’s a major experiential component of “Finance & Strategy”, our Level 4 workshops.
But how do you make sure you are getting good information? And how do you make good decisions, especially when faced with conflicting data or forecasts? I’ll discuss these in later posts in this series.