Archive for the ‘Management’ Tag

Why do smart executives make bad decisions?

Why do seemingly intelligent and well-meaning executives make bad business decisions?

As consultants, it’s a question that organizations task us with answering, often through postmortem reviews of failed strategic initiatives. The idea is to develop a better understanding of how and why pivotal (and ultimately poor) choices were made in hopes of not repeating the mistakes.

We look at the analysis undertaken, the managerial deliberation and how the final decisions were made. In each case, we discovered that the root cause of the bad choice(s) was not the decision-makers themselves — i.e. stupidity on the part of management — but rather a dysfunctional process for making decisions.

Optimizing the decision-making process can go a long way to improving the level of analysis, managerial buy-in and the quality of the decision. And — perhaps most importantly — it could spare your organization from being responsible for the next Edsel or New Coke.

Worst practices

Rigid silos
Whether purposefully, a product of geography or a matter of culture, employees in many organizations are “siloed” in discrete units or departments. Rigid silos restrict the flow of ideas, hampering the collaborative process required for developing sound analysis and making informed decisions.

Executives who possess a siloed worldview — i.e. “empire builders” — can be particularly toxic. Unlike lower-level managers, these individuals have the power to inhibit the allocation of necessary resources and the development and implementation of strategy that serves the interests of the larger organization.

Excessive politics
Politicking is inevitable when any group is gathered to make an important decision. The trouble occurs when politicking gets out of control and supersedes sound logic. This sort of dysfunction breeds and emboldens bias and ago, which can hijack the process and lead to lousy decision-making.

Common examples of excessive politicking include: prioritizing departmental or career goals at the expense of corporate ones; keeping key stakeholders in the dark through the widespread use of back-channel communications; and overemphasizing consensus building or “what will fly” over what makes the most sense.

Muddled processes
Most large organizations assert the importance of strategic problem solving and retain scores of managers who possess this skill. However, many of these firms fail to create and follow the right practices for guiding and empowering these individuals to reach their full potential.

The process — if it even exists — often follows inadequate preparatory work and is too brief, under-resourced and devoid of key stakeholders. Worse, the individuals who are in the room often possess a shared analytical framework thus and lack the skills, expertise and vision required for distinguishing between a good idea and a bad one.

Best practices

There is no silver bullet for creating and sustaining an effective decision-making process. Every company and situation is unique. However, getting the organizational fundamentals right can go a long way toward mitigating and eliminating many of the aforementioned issues. Generally speaking, best practices include:

  • Developing and implementing a systematic decision-making methodology and process
  • Encouraging open and frank discussions about all options, assumptions and scenarios
  • Providing access to high-quality and actionable data
  • Using practical and coherent criteria for evaluating decisions
  • Having engaged and impartial leaders overseeing the process

For more information on our services and work please visit Quanta Consulting Inc.  Follow me on Twitter @MitchellOsak or connect through email at


4 rules for running a business

Many companies in mature sectors have been known to embrace the latest management thinking (or fad) to help cope with low market growth, margin compression and lack of differentiation. Examples of these “big ideas” include lean management, outsourcing, business process re-engineering, offshoring and, lately, social business and cloud computing. Despite considerable effort and investment, most of these firms have been unable to outperform their peers over the long term, often due to weak strategic fit, poor planning or flawed execution.

In fact, only 344 of 25,000 public companies analyzed in the Harvard Business Review by Michael Raynor and Mumtaz Ahmed of Deloitte consistently produced above average return on assets from 1966 to 2010.

What made these firms special? Two rules identified in the study — noteworthy for their simplicity, reliability and practicality — helped drive the extraordinary business performance. Below them, I’ve included two other rules for achieving exceptional performance well worthy of consideration.

Better before cheaper

Companies need to focus first on service, quality, design or distribution — not on being the lowest-price competitor. Non-price differentiated brands tend to command richer margins, which can support further product and marketing investments, which, over time, further sustain the firm’s competitive position and profitability.

Revenue growth before costs

Leaders should prioritize top-line revenue by driving volume gains, competing in growing categories and taking advantage of every opportunity to maximize pricing. Volume increases also bring other benefits, including scale economies and channel optimization, which help drive down operating costs and block out competition.

Brands matter

“Brand equity might be the only asset that consistently generates differentiation, higher margins and long-term revenue streams,” says Jerry Mancini, president, Dole Packaged Foods Company. “Dole’s focus on value, quality and brand-building has helped deliver almost 100% brand awareness in close to 100 countries. This allows us, for example, to provide transient consumers around the world with the same quality and unique products they are familiar with, wherever they go.” This strong brand equity has enabled Dole to more easily tap new markets and categories — and drive higher volumes.

Maximize human capital

“Competition, technology and customers are never static,” says Paul Bruner, a partner with McCracken Executive Search. “The key to long-term success is attracting and developing leaders of exceptional character, with the brains, passion and resourcefulness to adapt to and lead through changing circumstances.” Organizations need to focus on recruiting and training the right employees and reinforcing positive behaviours through innovative training and compensation programs.

To be clear, the above four rules suggest a direction, not specific strategies and tactics; it is up to management to make the tough strategic choices and back them up with good plans and sufficient investment. Leaders still need to understand where they should compete (i.e., which markets with which value proposition) and what they are especially good at (i.e., organizational and asset fit). They’ll also need to support their mission by assembling the right capabilities and cultivating them through a culture of continuous improvement and adaptability. Finally, the company and shareholders must recognize they are playing the long game — they will need patience and resilience as well as management systems that reinforce long-term thinking.

For more information on our services or work, please visit the Quanta Consulting Inc. web site.

Re-introducing character in hiring

Warren Buffet once relayed the wisdom of another business leader that when looking to hire, managers should look for three qualities: integrity, intelligence and energy, and that if the first one isn’t present, the other two will kill you.

The current business climate has never been tougher on senior managers. Based on executive turnover statistics, many managers do not seem up to the task.  Perhaps organizations are too impatient, they cannot attract sufficient talent etc. Or, there is another reason.  The hiring process is ignoring a fundamental tenet of effective management — character.  You don’t need to go far (Dennis Kozlowski of Tyco and Jeffrey Skilling of Enron quickly come to mind) to find examples of how character deficit has seriously harmed a company. Fortunately, firms can bridge this character gap through better selection criteria and recruiting processes.

Every job description and recruiter talks about character but few actually account for it in a meaningful way.  Character describes a series of positive personality traits such as integrity, honesty and courage; it is a prerequisite for effectively dealing with people and their environments — in other words management. Maximizing the amount of character by person or group can help drive financial and organizational performance, including fostering effective leadership, encouraging communications and problem solving.  This can be especially true in difficult operating environments.

The character gap

Poor character has been cited as a major reason for high levels of turnover. In his research for the book, Hiring for Attitude, author Mark Murphy found that among the 20,000 new hires he tracked, 46% failed within 18 months.  About 90% of the time, the turnover could be attributed to attitudinal reasons such as low emotional intelligence, motivation and temperament. Addressing this character deficit is tough.  Herb Kelleher, former Southwest Airlines CEO has said, “we can changes skills levels through training, be we can’t change attitude.”

The impact of this turnover on organizational performance and cost should not be minimized. G.H. Smart, writing in his well-regarded book, Who, says “the average hiring mistake costs 15 times an employee’s base salary in hard costs and productivity loss. Hence, a single hiring blunder on a $100,000 employee can cost the company $1.5 million. “

Successful companies understand how important character is to business success.  Like Warren Buffet, Jim Collins, author of Good to Great, found that:  “The good-to-great companies placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge or work experience.”

Why does character get short shrift? The fault lies in the typical recruitment and evaluation approach:

Incomplete selection criteria: The usual job description includes a laundry list of needs that are weighted heavily on skills and experiences. Intangibles like character, if they appear, are often at the bottom of the description reflecting their lower priority and scant consideration. Worryingly, when an organization is under stress, their leadership may abandon character requirements altogether, adopting a “tough times call for desperate measures” approach.

One-dimensional assessment:Evaluators often focus on the tangible aspects of a candidate. Rarely, are questions around character posed.  Paul Bruner, a partner at McCracken & Partners Executive Search says, “Boards and Search Committees, for example, often feel uncomfortable exploring issues of character with senior-level candidates.  There is a tendency to assume because an individual happens to be accomplished in their field that they’re naturally a person of strong character.”

Transactional process: Although people-intensive, hiring by its nature is a transactional, time-sensitive and expensive process — especially when pricey recruiters are involved or a major role needs to be filled quickly. Unsurprisingly, the process can easily skip over “soft” issues like character.

Reemphasizing character

Use independent evaluators

It is natural for organizations and evaluators to have bias.  An objective and experienced recruiter can directly probe a candidate’s character, drill deep into references and provide an independent view.

Employ a character “lens”

Target character head on.  Ask specific questions that get to character like: Describe your three biggest work mistakes? Or, list your three core values? Firms can also use role playing to illuminate a candidate’s integrity in an ambiguous situation. Where possible, have two interviewers in the room, with one person posting challenging (but ethical) questions and another reading body language and taking notes.

Optimize the process

Some hiring decisions are mission critical. Bruner advises, “Organizations need to treat key hires like a major investment and undertake the necessary due diligence that includes undertaking multi-person, in-depth interviews and 360-degree reference checks.  Success comes from investing the time and asking the right questions.” Using psychometric testing can also provide deeper insights and confirmatory feedback.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

The best way to motivate employees

Unraveling this mystery has challenged companies in every industry for decades.  Managers can utilize “carrots” (e.g., increased pay, promotion), “sticks” (e.g., censure, demotion) or insecurity (e.g., threaten recession-induced layoffs) to increase performance.  However when it comes to some individuals and cultures, these strategies often fail to yield the desired results.   New research summarized in Harvard Business School’s Working Knowledge newsletter outlines a better approach.  The study’s author, Professor Ian Larkin, believes that firms can better motivate employees by leveraging the desire for peer recognition. 

Keeping up with the Joneses

You don’t have to be a psychologist to know that people instinctively measure their own standing, satisfaction and performance relative to others.  In a variety of studies, Larkin found that this trait is the most powerful workplace motivator.  According to Larkin, “…in deciding how hard we work and how well we think we’re performing, social comparisons matter just as much [as financial incentives].” Comparing themselves to their peers incites employees to work harder in order to be recognized or to maintain prestige. Absolute compensation does matters, but only to a point.

Follow the leaders

Larkin studied the impact of social comparison at a large enterprise software firm.  Hundreds of salespeople were offered one of two reward choices.  One option was to defer receiving a commission on a sale till the end of a financial period.  Deferral enabled the salesperson to receive a bonus payment but prevented them from recording a sale for a “Club” membership, a select group of the highest performing sales people. The other option was to record the sale and commission right away.  This choice disqualified the salesperson from the commission bonus but improved their chances of attaining “Club” membership, which though prestigious, carried no meaningful financial benefit.

The findings were telling.  Salespeople would forego the opportunity to make extra money if doing so would earn them positive recognition from their peers. Specifically, a sales representative was willing to give up nearly $30,000 in bonus (approximately 5% of their pay) to join the “Club.” Larkin believes club members “were not more likely to be promoted, leave for a better job, or make higher commissions in the future. It really was all about the recognition of and comparison with their peers, and many of them were willing to pay for it.”

The downside of comparison

On the other hand, social comparison also can lead to insecurity-driven cheating. Larkin studied author behavior in the large Social Science Research Network, an academic paper archive where authors can track statistics on how many times their paper has been downloaded, cited and viewed.  Researchers found that authors were more likely to download their own papers repeatedly when a colleague’s paper was performing especially well on the site, or when a very similar paper to an author’s was newly released and received significant downloads. “Again, what was surprising to us was how little we found in terms of the economic reasons for doing this,” Larkin says. “By far, the biggest predictor of this behavior was fear of being socially inferior to one’s peers.”

Management implications

This research has significant ramifications for talent management.   Companies need to more deeply consider the important role of peer comparison – now supercharged thanks to social networking – when designing compensation and measurement plans.  Paying each employee solely according to his or her performance can backfire, since it can lead to resentment or unethical behavior by workers who believe they are underpaid compared with their colleagues. In order to better motivate employees, firms may want to consider more uniform and standardized salary scales, combined with ancillary incentive programs and contests that exploit the positive effects of social comparison.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Social media for the C-Suite

By now virtually every CEO acknowledges that social media technologies are a fact of life and must be considered when developing corporate and brand strategy. In 2011, we reached out to a number of leaders in the industrial goods, financial services, and healthcare sectors to discuss how SM will impact their businesses.  These B2C and B2B firms, already engaged in modest SM marketing, were considering their next level of engagement.  Our conversations cut through SM’s hype, pointed to future areas of value and brainstormed implementation best practices. Below were some of their insights:    

Nothing changes…

While acknowledging its potential, the executives were clear that SM should not detract from what really matters – building, marketing and servicing differentiated and high margin products.  Program ROI is still important, perhaps even more so given the tough economic climate.  Although SM opens up new possibilities to engage customers directly, it remains at the end of the day just another channel.  This group viewed SM in an evolutionary light, whose value will unfold over time but after fits and starts.  They drew parallels to the rise, dashed expectations and rise again of e-commerce, whose emergence did not do away with physical stores.

…But don’t bury your head in the sand, either

Given its hundreds of millions of users and real-time nature, the leaders recognized that SM can have a major – both positive and negative – impact on the brand and their business model.  For example, SM could be a powerful tool for CEOs to magnify and tailor the corporate brand message to different audiences.  Conversely, the CEO can use SM to quickly and directly mitigate bad press and reduce reputational risk. Instead of receiving biased customer feedback from within their organization, senior leaders can leverage SM to collect unfiltered and real-time feedback to customers, partners and employees.

Visionary managers view SM’s potential beyond marketing and brand-building.  For example, some firms are enlisting internal and external communities to provide expert and timely customer service and decision-making support.  In another case, traditional recruiting practices are being disrupted by automated searches within LinkedIn and Facebook’s community of 750M+ members.

Despite the possibilities, none of the executives really knew where these technologies were headed and or how to permanently embed SM practices within their organizations.  To this end, I have assembled below some of our firm’s our best practices, all of which center around the management’s level of  commitment, resourcing and alignment.

1.         Show leadership

If SM is going to play an important role in the company, the CEO must explicitly establish SM’s strategic priority, goals and values. As a new, unproven initiative, SM often runs the risk of losing momentum and internal focus. CEOs should authorize the creation of measurement systems to quantitatively and qualitatively track program impact and market feedback.  To ensure that efforts deliver maximum customer impact,  the C-Suite should ensure that SM strategies are properly funded and staffed.  As well, it is vital that SM communications and programs reflect corporate values and are perceived by its audience as authentic, compelling and relevant.

2.         Prime the organization

Senior leaders must oversee the development of structures and policies that enable SM strategies while ensuring proper governance and internal compliance.  After all, no CEO wants an internal tweet showing up in the NY Times.  At the same time, management should be careful not come across as ‘Big Brother’ in directing and monitoring personal social media efforts.  When developing SM programs, care should be taken to ensure that key information circulates freely across the organization and that these initiatives are designed and managed through a cross-functional lens.   

3.         Test, refine and re-launch

When it comes to new technologies, there is no better way to gain learnings than to jump right in.  The most successful SM pioneers began with an executive-sponsored, cross-functional pilot.   This approach enables managers to better match program requirements with market opportunity and to cope with the deluge of market feedback – for example, deciding on whether some customer opinion is crucial or merely a nice to have.  The C-suite needs to play an ongoing role in guaranteeing that solid initiatives receive adequate funding, and that all learnings are communicated across the organization. 

A ‘walk, don’t run’ approach not only generates critical insights but it also allows firms to carefully review new business practices that may enable them to leapfrog competition.  These breakthrough areas could include crowdsourcing collaboration strategies, developing new gamification models that build consumer loyalty or creating new ways of catalyzing internal change.   

SM can appear scary but it’s really not.  The platforms and tools are not overly complicated, just  overly hyped, rapidly changing and often misunderstood. To successfully leverage SM, CEOs must provide consistent leadership while ensuring that internal efforts maintain strategic clarity, receive sufficient resources and reflect a learning culture.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Manager influence goes up when they are less certain

This counter-intuitive notion is the key conclusion of new research coming out of the Stanford Business School.  This research has important implications for senior managers as well as industries that sell expertise such as professional services, advertising agencies and recruiting firms.  

The researcher, Zakary Tormala, had subjects evaluate the appeal of a restaurant based on the assessment of two different reviewers.  Half the participants read the review by an expert (a professional food critic) while the other half read a review by an amateur.  Half of each group saw a review that was highly certain; the rest saw a review that was tentative.

Overall, while the confident amateur inspired subjects to give better ratings than the uncertain one, the less assured expert prompted higher ratings than the certain expert. The findings suggest people do not necessarily mistrust confident experts, but sometimes people are more persuaded by experts who are not confident.

What is behind this phenomenon?  Chock it up to a concept known as expectancy violations. People expect experts to be confident. Violations of that expectation surprises them, resulting in the individual taking greater notice and giving the opinion more credence. In the research, subjects reported being more surprised by the uncertain experts and the confident amateurs.

These findings do not suggest that CEOs should project uncertainly about their company’s prospect to become more influential. Having your audience take notice is not a substitute for ignoring a relevant message.  To be persuasive, managers must balance surprise with credibility. Being credible means a delivering message that is relevant to the core argument or issue.

Complementary research by Tormala also looked at how people view potential. Interestingly, the initial findings seem to show that people value high potential more than high achievement.  In one basketball study, people read the scouting report on a player and were asked to predict their salary level. Some subjects read the actual stats for the player’s first five years in the league while others read predictions for the first five years’ performance. The numbers were identical. On average, people gave the rookie over 20% more in salary in year six than the veteran.

These findings were similar to those found in the restaurant review study.   Proven achievement is very certain and predictable. At the same time, potential is uncertain and exciting.  The potential for multiple outcomes could lead to higher than expected results, and as a result, greater expectations for performance.

For managers and external experts, there are some key takeaways to build influence and trust:

  1. Foster a communication approach that emphasizes honesty, empathy and integrity;
  2. Adopt a more humble tone and style in place of the standard confidence-based rhetoric;
  3. Demonstrate analytical and process transparency underlying the opinion.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Stress test your strategy

Thousands of managers have just completed or are in the process of delivering their yearly strategic plan.  Unfortunately, many of these plans will fail to meet management expectations resulting in missed opportunities, wasted capital and reduced competitiveness not to mention senior executive career risk.  The business plans will miss the mark for many good reasons such as unforeseen competitive actions or supply chain disruptions.  Yet many plans will also fail as a result of fundamental strategic errors due to flawed assumptions, management bias and poor analytics.   

To reduce their downside and maximize the upside, prudent CEOs and Boards would be well advised to “stress test” their plans by asking a variety of probing questions, three of which include:

Do we really know and target the right customers?

One important strategic consideration is the decision of who is the primary customer.  Many companies fail to identify and focus on the largest and most profitable customer segments for their value proposition and business model.  In reality, many firms resist choosing just one customer type either because their value could appeal to many segments (i.e. “Who doesn’t want lower prices?”) or because they just can not properly identify and segment their high potential customers.  Poor choices around customer selection typically results in strategic confusion and missed opportunities.  

As well, numerous companies assume their customer’s needs are relatively static on a yearly basis.  In reality, customer needs, perceptions and habits shift over time, due to changes in demography, fashion, social-economic profile and general economic conditiions. Recognizing and addressing these changes can make the difference between plan success and failure. 

Do key business drivers get enough attention?

Countless managers embrace metrics and scorecards, following the old adage that “you can’t manage what you can’t measure”. All too often, strategists utilize so many metrics (e.g., customer satisfaction, loyalty, trial, Net Promoter Score etc)  that they can not manage the forest through the trees.  The result is often conflicting priorities and strategic confusion.  Having too many metrics also compromises one of management’s scarcest resources, attention, and will stifle innovation by reinforcing incremental thinking.

In other cases, organizations will focus on metrics that are not linked directly to what drives the business. Poor metrics will also illuminate symptoms of a problem while masking the root causes.  As a result, managers will often adopt the wrong strategies and tactics.

Is scare capital and focus optimally allocated?

Devising the right business strategy does not guarantee plan success.  Organizations need to make sure that their scare capital, attention and capabilities are deployed in the most effective and efficient manner.  Too often, sufficient investment is not directed at the strategies that address the highest potential opportunities. Instead, managers are often unable to prioritize strategies or feel internal pressure to spread the investment around. To ensure congruence between goals and means, senior managers must ensure that key priorities cascade down and across the organization and that major initiatives and strategies have formalized capital commitments. 

No panacea that can minimize all the risks associated with a strategic plan.  However, firms can improve their odds of success by asking some important questions about the accuracy of the data, the practicality of the plans and the validity of the assumptions. 

For more information on our services or work, please visit the Quanta Consulting Inc. web site.

Successful Strategy Execution – Lessons from the Military

It is widely acknowledged that without successful execution the best strategic plans often fail to meet expectations, resulting in wasted capital, reduced morale and organization disruption.  How can organizations bridge the gap between plans & actions and desired outcomes & actual results?

Firstly, it useful to review some of the barriers to successful execution:

  • Strategic plans are often poorly communicated down and across the organization, and lack a suitable strategic rationale;
  • Overt or hidden organizational friction gets in the way of smooth execution. Examples include: personal agendas impacting tasks, competing corporate priorities, poor operational accountability,   turf wars and changing organizational structure; 
  • The right information is not available to the right people at the right time

Companies can learn a lot about strategy execution by studying how militaries perform their missions.  The history of war demonstrates that “no plan survives first contact with the enemy.”  Historically, Generals have had to frequently make plan and resource adjustments as the situation changes, thereby slowing down the overall speed of execution.  To cope with this, many militaries have adopted a concept known as Mission Leadership (ML).  Basically, ML involves 3 core principles based on where and how leadership and decision making is exercised:

  1. Leaders provide and communicate clearly defined, succinct and understood military objectives through their subordinates;  these objective are trackable and are delivered with context;
  2. Leaders allocate resources to accomplish the task, provide dispute resolution and restrict their span of control so not to limit their subordinate’s freedom of action;
  3. Empowered and creative subordinates decide within their delegated freedom and available information how best to achieve the mission in the time allotted.

Corporations and militaries share similar external and internal states.  For example, both types of organizations compete in rapidly-changing environments characterized by a lack of (or imperfect) information, limited resources and internal misalignments.  Because of these similarities and it’s proven success on the battlefield, ML has been adopted by companies as diverse as Pfizer, Walmart and Diageo.

What have these industry leaders learned from ML?

  • The primary role of senior leadership is to identify key strategic priorities and objectives that support the business vision and then find the right combination of people, resources and structure to deliver maximum focus on these objectives;
  • To ensure accountability, the objectives must be measurable, tracked and linked to individual and departmental goals through performance evaluation systems;
  • A higher frequency and simpler style of communication is critical to ensuring alignment;
  • For effective decision making, employees need a clear understanding of personal and departmental operating space and their interdependencies with others;
  • There must be wide distribution of the strategic rationale and other critical pieces of information to guarantee clarity of purpose;
  • Leaders need to be facilitators that create the right environment for success including: delegating decision making down the organization, enabling a risk-friendly culture, stimulating cross-organizational adoption of best practices, and encouraging tactical improvisation for problem solving and stretch performance.

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Business Strategy Influencers – General Erwin Rommel

Many military thinkers, including Sun Tzu and Napoleon, have provided strategic insights for business leaders.  One of my favorites was perhaps the most skilled German general of World War II.  Among his many successes, Erwin Rommel’s tank division was the first German unit in the 1940 attack on France to reach the English Channel. Moreover, Rommel’s 1941-42 leadership of the Afrika Corps has served as a classic example of maneuver and indirect warfare.  Throughout his service, Rommel developed a number of maxims on military strategy that have a direct bearing on how business leaders formulate and execute strategy.  Here are a few of his pearls of wisdom:

1.         See for yourself

Rommel regularly operated near the front so as to clearly understand the battlefield situation and to make immediate decisions when the tactical conditions changes. 

Management Learning:  Too often, executives do not spend enough time in the field talking with customers, channels and suppliers to get accurate, unbiased facts. In addition, being on the front lines often improves employee morale and generates goodwill with clients.

2.         Concentrate your force at the decisive point

Despite usually having numerically inferior forces, Rommel understood that if he concentrated his power at his adversary’s vulnerable point he could gain an overwhelming advantage. Splitting the Allied forces in this fashion enabled him to destroy them piecemeal at different times of his own choosing.

Management Learning:  Focusing resources at a competitor’s blind spot or weakly defended market (as opposed to their strongholds) can quickly lead to market penetration and the establishment of a defensible position. This strategy may also reduce your business risk as competition may not be prepared or able to counteract your moves.

3.         Surprise and speed are everything

In every campaign, Rommel endeavored to achieve tactical surprise, hoping to catch his foes disorganized and unprepared.  Once surprise was achieved, Rommel’s aim was to quickly exploit the advantage with highly mobile forces.  It was not an understatement that one of Rommel’s units was known as the Ghost division.

Management Learning:    Attaining first mover position enables new entrants to preempt an immediate and possibly lethal response while potentially building a sustainable advantage.  Furthermore, decisive executives understand that slow or poor execution is expensive, risky and fraught with opportunity cost of foregone revenue.

4.         Protect your supply lines

Rommel recognized that a high tempo, rapidly mobile army requires a flexible yet uninterrupted supply line.

Management Learning:  Rapidly growing and profitable markets requires supply chains that are reliable, scalable and efficient. In knowledge-intensive industries, prudent executives recognize the importance of maintaining their ‘human capital’ supply chains including effective recruiting and training.

5.         Outsiders often are more effective than insiders

Originally trained in the Alps as an infantry officer, Rommel went on to become a leading practitioner of tank warfare, both in the lush, rolling hills of Europe and the bleak deserts of North Africa.  As such, Rommel was not a prisoner of a static frame of reference, conventional wisdom or inherent bias.   His expertise lay in the mastery of many generalist skills including a genius for improvisation, a follow-me leadership style and a propensity for thorough research & planning.

Management Learning:   Rommel’s experience supports the view that effective leaders can come from outside of the home industry.  Possessing traits such as the ability to understand key customer & market drivers, being a creative problem solver and a passionate leader may be just as important as domain expertise.