That’s the essence of strategy and the logic of competition at every company we’ve visited in these two chapters—from ING Direct’s campus in Wilmington, Delaware, to Cranium’s fun-and-games headquarters in Seattle, to HBO’s building near the beach in Santa Monica, to our many stops in between. Sure, it may seem safer, more prudent, more conventional, to devise a game plan for your company that conforms to the generally accepted rules of how your industry works. But if that’s such a winning formula, why are so many industries in such dire straits? That simple question speaks to the long-term futility of a business formula based on strategy as mimicry. Back in chapter 1, ING Direct’s Arkadi Kuhlmann said it best with a question of his own: if you do things the way everybody else does them, why do you think you’re going to do any better?
NOTES - CHAPTER TWO
COMPETITON AND ITS CONSEQUENCES: DIRUPTORS, DIPLOMATS, ADN A NEW WAY TO TALK ABOUT BUSINESS
1. For a lively discussion of the most profound and productive lessons of the Internet boom, see the interview by George Anders, “Marc Andreessen, Act II,” Fast Company (February 2001). Another valuable interview is “On the Record: Marc Andreessen,” San Francisco Chronicle, December 7, 2003. For helpful background on Tellme, see “A Telemarketer You Can Talk To” by Steve Rosenbush, BusinessWeek, June 22, 2004, and “Tech IPOs: Here Comes the Next Wave” by Justin Hibbard, BusinessWeek, March 7, 2005.
2. For a soft-spoken guy who doesn’t seek attention, Craig Newmark attracts plenty of it. Here is our list of the best writing about the company: “Craig$list.com” by Ryan Blitstein, San Francisco Weekly, November 30, 2005; “Guerilla Capitalism” by Adam Lashinsky, Fortune (November 29, 2005); “Web Board Craigslist Makes a Name for Itself ” by Janet Kornblum, USA Today, September 28, 2004; “Craig’s To-Do List: Leave Millions on the Table” by Matt Richtel, New York Times, September 6, 2004; and “The Craigslist Phenomenon” by Idelle Davidson, Los Angeles Times Magazine, June 13, 2004.
3. For an unblinking assessment of the turmoil facing the toys and games business, see “More Gloom on the Island of Lost Toy Makers” by Constance L. Hays, New York Times, February 23, 2005. For a case study on the birth and growth of Cranium, see “Inside the Smartest Little Company in America” by Julie Bick, Inc. (January 2002). For some philosophy on fun, families, and the Cranium formula, see “The Play’s the Thing” by Clive Thompson, New York Times Magazine, October 28, 2004.
4. The Wall Street Journal’s Jim Carlton revels in the company’s Silicon Valley sensibilities in “Taking Lessons from a Tech Book,” June 2, 1999. In “Building the New Economy” (Fast Company, December 1998), Eric Ransdell offers a must-read for anyone interested in DPR. After the company won a Sacramento Workplace Excellence Award, the Sacramento Bee provided a smart take on how DPR works in “Looking Up” by Loretta Kalb (April 1, 2004).
* Not that Netscape should be thought of as a failure. The acquisition by AOL, when finalized, was valued at $10 billion—not a bad price for a company that was less than five years old.
* In a neat twist, Microsoft paid to acquire McCue’s company. In March 2007, the Redmond-based giant announced a deal worth a reported $800 million.
* As impressive as these figures seem, they’ll be out of date by the time you read them. Craigslist is growing so fast, in so many places around the world, that it’s almost impossible to publish data about the operation that isn’t obsolete by the time it appears in print. Fortunately, the site itself maintains reasonably up-to-date statistics for those who are interested.
* Fans of Jim Collins’s will notice the obvious influence of his ideas at DPR. The company’s founders spent time with the celebrated business guru early on in the company’s history and worked to apply many of the ideas from Built to Last as they built their organization. It’s a fascinating case study—translating timeless ideas honed at blue-chip companies, from 3M to Disney, to a young company in the rough-and-tumble world of commercial construction.
Maverick Messages (I): Sizing Up Your Strategy
Few companies consciously set out to be just another me-too player with another ho-hum business model, following a bland formula that’s hard to distinguish from everyone else’s. But in industry after industry, that’s precisely how most companies wind up competing, which is why competition feels so unforgiving.
In his hugely influential book The Innovator’s Dilemma, Clayton M. Christensen awakened business to the power of “disruptive technologies”—digital breakthroughs that reshaped the governing economics of entire product segments, sometimes whole industries. We believe that a new wave of strategic innovation is being built around disruptive points of view. Maverick leaders don’t just strive to build high-performance companies. They champion high-stakes agendas. They create a competitive edge around an edgy critique of their industry. They present a fresh take on the world that clicks with customers, energizes employees, and shapes their business, from the markets they target to the customers they serve and the messages they send. They understand that the only sustainable form of market leadership is thought leadership.1
Roy Spence of GSD&M calls his ultimate goal “positioning beyond defeat”—being so clear about a company’s purpose and so relentless about turning that purpose into a collection of business strategies and operating practices and a set of messages to the marketplace that traditional competitive responses are rendered largely ineffective. “People don’t have time for companies to be confused,” he argues. “Neiman Marcus knows it’s for rich people. Deal with it. Nike is in the business of crushing the competition. So be it. The companies that get in trouble are the ones that are mushy about who they are.”
As you work on positioning beyond defeat—as you think about the values you stand for as an organization and as a leader—ask these five questions about your company’s strategy.
1. Do you have a distinctive and disruptive sense of purpose that sets you apart from your rivals? That’s the defining question at the heart of these first two chapters, and it’s what separates the mavericks we’ve highlighted from their me-too competitors. The founders of DPR Construction were determined, from the moment they started the company, to reckon honestly and openly with the designed-in flaws of their industry and to build an organization that would prosper by fixing those flaws. The founders of Cranium didn’t launch their company because they had one good idea for a single board game. Instead, they had a wide-ranging critique of what was wrong with family entertainment—and an unapologetic sense of mission about providing a clear alternative, through board games but also through book publishing, TV shows, and other lines of business that Cranium has begun to enter