The year 1981 seems so distant and passive. A lot has happened in 38 years – technology, innovation, creativity, the rapid evolution of the internet, Microsoft, Apple, Amazon, iPhones, digital media and disruption.
Some 7.5 million people around the world rushed out and bought a business book, “In Search of Excellence”.
Authors Tom Peters and Bob Waterman jnr were consultants with the Boston Consulting Group and had studied the supposed best-run companies in the United States of America. The focus was narrowed to twenty entities. They then identified, isolated and analysed twelve common key features and characteristics.
Among the key dimensions the philosophy:
“STICK TO THE KNITTING”
That is, to recognise, respect, refine and adhere to that which one does best. The inherent discipline avoided, or minimised, the distractions and allure of expanding product/service lines, activities and markets.
A MATTER OF TIME
Among the profiled companies was General Electric (GE) which at the time manufactured, distributed, sold and serviced aeroplane jet engines, high-order medical equipment, refrigerators, household white goods, credit cards, finance and insurance services.
Chairman and President, Jack Welch, was held up to be an outstandingly successful business leader. His books on leadership, management and entrepreneurship sold millions of copies globally.
For formal and informal students and practitioners of commerce, Jack Welch was an authoritative sphere-of-influence.
He was foremost in taking a company first established by Thomas Edison to manufacture, distribute, retail and service incandescent electric lights, to being a global leviathan operating in many sectors, regions and nations.
Considerable wealth was created. In relatively recent years, Jack Welch has retired, and GE has lost around 95% of its share-market value. Companies, brand-names, products, services and supply chains have been closed, liquidated, merged and sold-off.
With the effluxion of time, the advantages, benefits, rewards and economic sustainability of specialisation and sticking to the knitting became apparent.
Contemporary General Electric, a much smaller, focused and disciplined trading entity is now pursuing organic growth, within strict philosophical and cultural parameters.
In Australia, evidence is mounting that between, and within sectors, categories and professions, companies, firms and groupings are applying the same or similar templates.
Woolworths, the largest supermarket network in Australia, has decided to separate and/or dispose of all or most of its interests in service stations, liquor stores, hotels and gambling machines.
It is an extension of the, doubtless, painful, and expensive decision to cease operating the Masters hardware, retail chain.
Woolworths does supermarket retailing well – better than most, if not all local competitors.
Concentrating its resources, focus and capital on what it does best, provides scope to leverage the outcomes, to the benefit of shareholders, customers, suppliers, associates and its extensive workforce.
Shorter supply-chains and tighter, integrated internal communication channels facilitate more efficient and effective operations, and provide the basis for heightened defensive strategies.
A MOMENT TO REFLECT
During the first week of July, 2019, Lee Iacocca, the former President of both Ford and Chrysler, died at age 94.
Infamously he was removed by Henry Ford II, and subsequently took up the top position with Chrysler, which had failed financially. Chrysler was the first U.S. enterprise ever to receive federal funding support to survive.
Lacocca accepted an annual base salary of $1.00 – plus, performance bonuses.
He marshalled what resources he had, was the catalyst for a new range of Chrysler vehicles and fronted the mass media advertising campaign.
His message, a challenge, was captivating:
If you can find a better car, buy it.
He stuck to the knitting. After the first year, the company returned to profit. He pocketed a $20 million bonus.
Within a short period, the U.S. federal government was repaid, with handsome profits.
Focus, discipline, pride and enthusiasm, hard work and customer care are profitable.
Part of the Chrysler advertising message was the statement:
There is only one thing more important than excellence… maintaining it.
Telling, evocative and outstandingly successful.
Over time, Lee Iacocca retired, new management teams were installed and new cultures and philosophies implemented. Chrysler broadened its scope in its merger with Nissan and Renault.
An initiative that failed and is progressively being unwound.
Growth, adaptations and globalism are, in their own rights and when applied judiciously and appropriately, laudable.
Organic growth is typically slower than an assertive acquisitive pathway.
When complemented, influenced by and contained within the parameters of sticking to the knitting, the prospects for sustainable success are enhanced.
There is no single formula which can be, or should be applied to and by all.
It is, however, an important step to excellence, and in maintaining it.
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