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CHAPTER ELEVEN
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REPOSITIONING BEGINS AND ENDS WITH THE CEO
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Since we wrote about leadership in the previous chapter, let s talk about the leader s involvement. In one of our many strategic meetings at one of America s largest companies, a young lady presented me with what we consider one of the most important pieces of advice I have ever received about positioning. At the end of a presentation, she came over and offered congratulations on what she thought was an excellent piece of thinking. But then she startled me by saying that we would never sell any of our repositioning ideas. When I asked why, she replied with a simple but brilliant observation: You ll never have the right people in the room. She went on to explain that the top people don t go to meetings like this. And powerful ideas always clash
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REPOSITIONING BEGINS AND ENDS WITH THE CEO
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with someone s personal agenda. This ensures an early demise for any concept that has to work its way up the organization for final approval. Boy, was she right. Over the years, we ve learned that brilliant thinking never wins the day on its own merits. If you don t have the right people in the room, effective positioning or repositioning becomes a long shot at best.
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Old Cash Cows
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The first type of obstacle a repositioning idea will often encounter is an old cash cow. New ideas tend to be built on new opportunities, which can sometimes challenge old businesses. The result is a reluctance to foster the new ideas. Peter Drucker calls this slaughtering tomorrow s opportunity on the altar of yesterday. In a meeting at IBM, we were encouraging the company to position its new line of workstations as PMs, or Personal Mainframes. This obviously would have upset the head of the mainframe business, a business that was still throwing off big profits. At the other end of the spectrum, the head of the personal computer business probably would have complained as well. Only the CEO could have made the decision to pursue a concept that potentially could have attacked his
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REpositioning
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biggest cash cow. And since he wasn t in the room, he never had a chance to consider a strategy that today looks pretty good, when you consider the industry trend toward desktop machines. The most successful companies are quite good at attacking their cash cows. Gillette is a prime example. First it slaughtered its single-edge and stainless blades with the highly successful twin-bladed razor (Trac II). Then it attacked that idea with an adjustable twinbladed razor (Atra). Then came the shock-absorbing razor (Sensor). Then the company came up with a sensor with fins. It s called Sensor Excel. Then it was on to the multiblade razors, Mach 3 (three blades) and Fusion (five blades). If Gillette comes up with a better idea, it will reposition its older blades as being obsolete. At Gillette, there is no such concept as getting ahead of oneself, concludes Booz & Company, the global consulting firm. New products go on the drawing board as much as a decade before they are introduced. * Now consider the less than successful companies. Xerox invented laser printing but never exploited it. Kodak invented digital photography, but it never got out of the laboratories. Watching the decline of film, you know why.
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* Glenn Rifkin, Anatomy of Gillette s Latest Global Launch, Strategy+Business, Second Quarter 1999, p. 84.
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REPOSITIONING BEGINS AND ENDS WITH THE CEO
Old Bad Decisions
Another problem with not having the right people in the room is the ghost of old bad decisions. New strategies often clash with prior decisions. In many years of strategic work, no one has ever said, We re glad you ve arrived. We ve been doing nothing while we ve been waiting for you to get here. Obviously people have been doing a lot, some of which wasn t working very well. (People don t call you when things are good.) Unfortunately, no one in a large corporation wants to admit to making a bad decision. Especially a bad big decision. This is particularly true in an organization that isn t very good at tolerating failure. As a result, it goes against almost all middle-level managers instincts to embrace any new idea that could cause them embarrassment about their old decisions.
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