Be very, very good at what you do. Once that was the mantra for business success. In Search of Excellence sold millions of copies because it brought forward the idea that companies which excelled at identifying and delivering customer value sold more and made more money. Not bad advice at the time. And from that advice grew all kinds of recommendations to understand “core” customers, capabilities, technologies, costs, etc. – then benchmark your performance against competitors and do more so you remain #1. That thinking has been around for 30 years. Unfortunately, its far from enough to create success in 2010.
Motorola was once #1 in mobile phones. It had developed smartphones, but they were not part of the core product line. So Motorola did everything it could to keep selling Razrs.
When Apple introduced the iPhone Motorola was selling 35 miillion units/quarter. Three years later Apple is shipping more iPhones than Motorola is shipping all its phones. By creating a marketplace disruption Apple knocked Motorola out of first place in mobile phones. Motorola stuck to what it new best, and despite its great strengths in its traditional core competencies and markets saw revenues and profits plummet.
Nokia did a much better job of maintaining unit volume in handsets. But unfortunately it has had to drop prices dramatically to maintain volumes. Profits have evaporated, and nobody really cares much about what Nokia is doing any more – despite its huge handset volumes. The excitement, and profitability, is going to the smaller unit volume Apple. As a result, the market value of Nokia had dropped more than 50%, while the market value of Apple has exploded 200%!
Both Motorola and Nokia maintained a focus on their “core.” Core markets, products and competencies. Yet, they are now market inert. Motorola is in oblivion. And that’s the message in the Forbes article “Stop Focusing on Your Core Business.” We easily become obsessed with doing what we’ve historically done well better, faster and cheaper. So obsessed we miss market shifts. And that is deadly. Only those companies that can transition to new markets – and new competencies —- that can develop new “cores” by not being too closely tied to the old ones – have any hope of long term success.
PS – I bet you think your words are your greatest communication tool. Think again! In a great Forbes article “How To Win an Argument Without Words” Nick Morgan describes why body language can be more important than what you say! Overcome your lock-in to thinking what works in a meeting or presentation and pay attention to what really may make the difference!!