Outsmart!

With tough-talking new finance minister, Pravin Gordhan, taking over the reins in South Africa and warning that economic conditions will lead to a reduced fiscus, smart will become the new mantra for business. Recessions are marked by the survival of the smartest: companies that do more with less and outsmart the competition - in a punishing environment - with ingenuity rather than resources.

“The prize will go to the smartest competitor: In whatever field you're playing, you must outsmart all your rivals.” - Jim Champy

Outsmart!, Jim Champy's best-selling book, has never been more relevant, and points clear distinctions between smart companies, which see and exploit opportunities, and 'incumbent firms' that are either too insular to see new chances, or too cautious to move in a new direction.

Frightened of the future, incumbent firms dislike new ideas and quash them at every turn, Champy says. Smart firms, on the other hand, are not timid or rigid, but are boldly ambitious, place a higher premium on seasoned intuition over endless research, and work in business areas where they have expertise. Not afraid to act, smart firms move ahead quickly when they see opportunity arise and focus with laser intensity on customer needs.

Carpe diem!
New business opportunities abound. Global markets are rapidly expanding. The Internet puts companies in touch with the whole world. For business leaders, the crucial step is being able to see the special opportunities that now exist and being able to exploit them quickly. Many companies are too insular to see anything fresh. Others are too hidebound to strike out in new directions. These are the “incumbents”. What about your firm? Is it an incumbent firm or a “smart firm” that jumps at opportunities? The following case studies demonstrate the types of fascinating business opportunities that await smart companies whose leaders are visionary and bold enough to seize the day.

“Business has never been more complex, volatile and demanding, yet so full of opportunity.” - Jim Champy

Seeing what other's don't
In the past, music agents would do anything to avoid working with unproven musicians. The small fees they could earn representing the typical garage band or unknown singer were not worth it. The Internet firm Sonicbids changed all that. Its entrepreneurs saw something no one else did: Small club dates, weddings, proms, bar mitzvahs and similar engagements represent a $15 billion market in the aggregate. So Sonicbids found a way to bring agents and musicians together. Musicians pay a small annual fee to join Sonicbids' Web site and access its listings of hundreds of thousands of small musical gigs. Sonicbid helps musicians create electronic press kits with film and music. Musicians pay a small “reviewing” fee to get promoters and other people who handle events to look at their kits, so the promoters can consider booking their bands to perform.

Breaking free of mental legacies
Why should people have to go to a hospital emergency room for minor yet acute medical problems like allergy attacks or infection flare-ups that do not require a physician? The waits are interminable. The costs are high. The process is inefficient. Why indeed? asks MinuteClinic. The firm treats such minor medical problems at kiosks staffed by registered nurses at large retail stores, in shopping centers and in similar locales. Patients seldom have to wait, but if they do, MinuteClinic gives them pagers so they can shop until it is time to see the nurse. MinuteClinic saw an unmet need - speedy, hassle-free, professional care for minor medical issues - and quickly met it. A relatively new start-up, it now has more than a half-million customers each year. CVS Caremark Corporation recently paid the founders $170 million to buy the company. MinuteClinic's big-picture approach brought a retail perspective to healthcare. Isn't it time to leave old thinking behind and 'widen your lens' so you can see opportunities that others miss?

Basics are blazing
More than 150 years old, the Smith & Wesson (S&W) gun company supplied the weapons for US Civil War soldiers and old West lawmen. But, despite its 'world-class brand', S&W's sales flattened. Its new CEO, Mike Golden, a marketing expert from Black & Decker, found that the firm was just going through the motions. To turn things around, he put the 'accumulated wisdom' of a lifelong business career to work. He did research showing that S&W was a beloved brand. He set firm goals for manufacturing and sales. He expanded into new markets. He dropped independent sales agents and hired - and trained - company salespeople. He started a lobbying effort to win police departments as customers. This 'back to basics' approach worked. According to Russ Thurman, editor of Shootingmagazine: “No company in modern history has come back from the dead like Smith & Wesson.” In 2003, sales were $100 million; in 2007, they were $237 million. Golden capitalised on S&W's most valuable asset: its brand. Do you know what is most valuable within your company? Build everything from there.

Recessions are marked by the survival of the smartest.

Mandy de Waal, ITWeb contributor

“Opportunities lurk in neglected fields everywhere, especially in places where people take dysfunction as the expected way of life.” - Jim Champy

Changing your frame of reference
Shutterfly used to be a simple, unremarkable online photo finisher. Then Jeffrey Housenbold became CEO. He saw the firm in a radically different way. He quickly remade Shutterfly into an online community of photo aficionados who could share pictures with each other over the Internet. Plus, Shutterfly's customers-now-members could purchase a wide range of products to imprint to showcase their photos, including posters, calendars and coffee mugs. Housenbold's expansion plan, combining 'commerce and community', worked. Shutterfly's sales skyrocketed. The company created an online community that communicates internally, and buys its products and services. Are you doing business on the Internet? Creating an online community is great, but you have to have focus: There must be a commercial payoff somewhere.

Creating order out of chaos
Getting a part for an appliance, TV or some other piece of electronic gear from the manufacturer in a reasonable period of time used to be impossible, given that more than eight million parts are available. But, now, Partsearch has catalogued all these parts and made ordering easy. Now, technicians and consumers can order and quickly receive the exact parts they need for machines from more than 560 different brands. Why didn't someone else think of this? Maybe because securing all the needed parts information (including constant updates), cataloging the data, and developing an ordering and distribution system that would pay off for everyone was a hellishly complex task. But, Partsearch saw the need and did the work, with great results. Since 2001, the company has experienced an 'astounding compound annual growth rate of 85%'. Revenue was $63.7 million in 2006. With thousands of different suppliers, the industry for appliance and electronic parts is seriously fragmented. It was just waiting for a smart player like Partsearch to come along and simplify things. What fragmentation can your company fix?

“In any conditions, business keeps going - and the winners will outsmart the losers and keep growing.” - Jim Champy

Get the full abstract from Learn2Think. Simply go to this link, fill in the form and Learn2Think will e-mail you the full abstract of Outsmart! for free. The final part of the abstract deals with simplifying complexity, doing everything yourself, and details a number of smart lessons you need to learnt to outsmart the competition.

Jim Champy also wrote Reengineering the Corporation: A Manifesto for Business Revolution. He helped create and popularise business process re-engineering, and he develops strategy for Perot Systems consulting practice.

Outsmart!: How to do what your competitors can't
Country: United States of America
Format: Hardcover Publisher: FT Press
ISBN: 9780132357777
Publication date: February 2008
Pages: 188