Only a relative few have made significant, successful adjustments to changing conditions from irresistible forces (such as financial markets, weather, demographics, new technology, and attitude shifts). There is perhaps no more interesting an example than Berkshire Hathaway, which started as an owner of a failing textile mill that eventually did go out of business due to adverse conditions.
Since then, Warren Buffett, Berkshire’s founder, has successfully navigated the changing tides of business and financial markets over the years to built one of the most successful companies ever. Unlike Microsoft and Intel which had relatively few important shifts in irresistible forces, Berkshire Hathaway has weathered many by redirecting its resources and energies into more promising directions.
After having been primarily a portfolio manager of a handful of common stocks for many years, the company has recently shifted again to emphasize purchasing and operating companies. You too can learn to catch the full benefit of today’s volatile and rapidly changing forces and spur your enterprise on to greater and more rapid growth than ever before.
Be Prepared: Being in the Right Position to Optimize Opportunity
Many business people are fond of saying, “I’d rather be lucky than smart.” Everyone has experienced the exhilaration of an unexpected boost from favorable circumstances and wishes it would happen more often. Choosing a strategy that puts you in the right position is a way for you to create your own good fortune.
You will achieve more favorable results by thinking differently so you work smart, not hard. Asked why he scored so many goals in hockey, NHL scoring champion Wayne Gretzky replied that he skated to where he thought the puck would be going. That gave him an important edge because most other skaters go toward where the puck is already.
But it isn’t enough to just be in the right place at the right time. The tightrope walker working outdoors in the wind prefers that the wind be at her back, because a side wind could more easily knock her off balance. Setting up the tight rope to make the breeze’s direction favorable can provide the necessary advantage for her. She can further improve her security by using a balance pole.
To move your enterprise from its current position to a better one takes careful thinking It’s like the tightrope walker finding the wind coming from the wrong direction, and demanding a move in the tight rope’s location before she performs. The equipment handlers have a lot of hard work to undo and redo. That’s the bad news about getting into the right position.
The good news is that once your company has reached its ideal position, your subsequent need to change will be less. In the long run, this means less change, less work, as well as better results. Like the Olympic wrestler who fights his way to a position securely on top of his opponent, you will be able to seize superior positions that will allow you the advantage no matter how your competitors react and your business environment changes.
Most organizations are unfortunately like the wrestler’s opponent, operating subject to the whims of powerful competitors and vagaries of circumstances as their noses grind into the smelly, dirty mat. Is yours one of them?
If your enterprise is like most, it operates according to a plan. Your business pays attention to executing that plan. When things go wrong, most people in your organization will try to protect their self-interest and their chances for achieving the plan’s goals. If things get bad enough, they’ll be stunned into inaction.
These behaviors reflect some of the many faulty thinking patterns you should abolish and replace in order to achieve a winning position in an increasingly volatile and unpredictable organizational environment. You need to focus on getting the most benefit from your enterprise’s irresistible forces rather than trying to fend off the forces.
Every change in irresistible forces provides new opportunities to those who think that way. For very cyclical businesses, when demand is strong, you can sell high-cost facilities and obtain long-term relationships with attractive customers. When demand is poor, you can buy low-cost facilities, repurchase your own stock, negotiate lower prices from suppliers and get complementary competitors interested in merging with you. There is always some optimal opportunity being presented, if you learn how to look at the circumstances with an eye prepared to gaining important advantages from your business’s environment.
Once an opportunity is recognized, you need to be properly prepared to take the right actions at the right time. You have to have the flexibility to take advantage of rapid and extreme changes in irresistible forces. Such flexibility can be improved through the use of planning extreme scenarios that greatly exaggerate the future impact of these forces to clarify opportunities.
This thinking requires using an improved kind of scenario planning for possible future circumstances, most of which will never occur. By studying these scenarios uour enterprise will then locate and be ready to implement its “Always-Win, No-Lose” opportunities, that minimize the down side, while leaving the up side open-ended, regardless of the irresistible forces.
This form of strategy replaces the costs and delays for your organization learning primarily through broad scale trial and error. Irresistible force management is the missing element that makes this possible.
Copyright 2008 Donald W. Mitchell, All Rights Reserved
Donald Mitchell is CEO of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage . You can find free tips for accomplishing 20 times more by registering at:
www.2000percentsolution.com
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