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Finally, implement any difficult strategy slowly, especially if it s of the repositioning kind. People need time to adjust to change. By making changes slowly, you reduce the anxiety that comes with a dramatic shift of strategy.
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* Peter F. Drucker, Management: Tasks, Responsibilities, Practices (New York: Harper & Row, 1974), p. 61.
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REPOSITIONING BEGINS AND ENDS WITH THE CEO
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As someone once said: Most people can survive the old way. Most people can survive the new way. It s the transition that ll kill you. Many years ago, with my ex-partner, Al Ries, we advised Burger King to hang Kiddieland on McDonald s and reposition Burger King as the place for grown-up kids. This would have meant sacrificing a part of the market to McDonald s, not to mention eliminating swing sets from its franchisees facilities. This represented a major shift in strategy, and it created instant anxiety. The only way to sell this idea was on a test it and roll it out slowly basis. Unfortunately, anxiety won out over slowly, and an opportunity was missed. This all points to the inescapable fact that repositioning is serious stuff. It sets a new direction for a company s business strategy. And when serious decisions are being made, top management must be in the room.
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Since we are talking about top management and its involvement, it s fitting to end this chapter with some additional Peter Drucker management advice on repositioning. As you can see, taking his advice certainly calls for having the right people in the room.
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REpositioning
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One thing is certain for developed countries and probably for the entire world we face long years of profound changes. An organization must be organized for constant change. It will no longer be possible to consider entrepreneurial innovation as lying outside of management or even as peripheral to management. Entrepreneurial innovation will have to become the very heart and core of management. The organization s function is entrepreneurial, to put knowledge to work on tools, products, and processes; on the design of work; on knowledge itself. Deliberate emphasis on innovation may be needed most where technological changes are least spectacular. Everyone in a pharmaceutical company knows that the company s survival depends on its ability to replace three quarters of its products by entirely new ones every ten years. But how many people in an insurance company realize that the company s growth perhaps even it s survival depends on the development of new forms of insurance The less spectacular or prominent technological change is in a business, the greater the danger that the whole organization will ossify, and the more important, therefore, is the emphasis on innovation.*
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* Peter F. Drucker with Joseph A. Maciariello, The Daily Drucker (New York, Harper Business, 2004), p. 77.
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CHAPTER TWELVE
REPOSITIONING IS OBVIOUS
When it s time for you to
reposition, the problem you face will be obvious, and the solution to the problem will be obvious. But people tend not to see the obvious. General Motors need to reposition itself has been obvious for decades, as its market share has declined year by year over a quarter of a century. To dramatize this, here s what I wrote in 2001 in a book entitled Big Brands. Big Trouble. It wasn t a prediction that came true. It was an obvious observation.
Enter the Board
With the declining market share, it s not surprising that some years ago the board revolted and ejected top man-
REPOSITIONING IS OBVIOUS
agement. In recent years, we ve seen new CEOs that weren t bean counters, a new marketing chief, brand managers: You name it and it s been tried. But nothing so far has seemed to drive that market share uphill. The latest effort is the youngest CEO ever appointed. At 47, Rick Wagoner plans to dislodge the insular management style and to bring GM up to Internet speed with e-everything. Will this Digital Drive be enough Will people want to buy GM cars because they are rolling communications devices that are connected to the Internet Or because they have an On Star button on the dashboard (Hey, Batman has one on his Bat Car.) Will a digital supply chain help GM make cars faster, cheaper, and more customized Maybe it will. But GM s last fling with technology la robotics didn t change things very much. And this brave new digital technology doesn t address the basic problem. General Motors has forgotten what made them successful. It all comes down to the same situation that Sloan faced over 80 years ago. How could GM sort out and position their several brands so they would be different and work together on a complementary basis The answer took major surgery in 1921 as Sloan exited two brands, consolidated activities, and repositioned what was left. Fixing things in 2001 will probably take major surgery again. Phasing Oldsmobile out is a good start but
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