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September 2003
Comfort Zone
Several recent events – some significant; others minor – have caused many here to think about the pitfalls of getting too comfortable.
Foremost, are the recent “blackouts” throughout the northeastern U.S. and Canada. Despite the multiple media coverage and articles written, it’s very difficult to imagine how strange and challenging those days must have been. Talking about taking such simple pleasures (Subways? Elevators? Ice cream?) for granted – electricity is one of our inalienable rights, guaranteed by the constitution, isn’t it?
On a lesser scale, during a recent trip, there was a server problem in a hotel (or so they said) and the high speed internet access I’d grown accustomed to not only didn’t work, but the emails I thought I had sent, never got through. They are probably still somewhere in cyberspace. I patiently resent two days worth while waiting for an airplane on my way home. It was far more frustrating than it should have been.
Individuals and organizations get very comfortable and used to all sorts of “comforts” and we all develop expectations which occasionally should be challenged or, at the very least, examined.
It happens all the time in the newspaper world. Some might submit that even during the difficult past couple of years, we remained overly comfortable. Even though margins have been squeezed and our “expected” classified revenues plummeted many decided to “ride out the storm” and not examine, review, discard or destroy paradigms that have outlived their usefulness.
Here’s a vivid example: we work with one wonderful middle market newspaper interested in expanding in an adjacent affluent, competitive (another daily) area. Should they or shouldn’t they? If not there, where? A whole host of questions that cried out for market research. And, that’s just what they did.
We surveyed the market, over sampled in possible expansion areas, conducted Prime Prospect analyses to identify the best prospective new customers in existing and potential expansions areas and delivered the findings, complete with a host of recommendations.
We strongly encouraged our client to forego expansion in the competitive area and that resources and focus be directed elsewhere…that some different content offerings would be better received in “our” recommended expansion area and that promotion would be the key to success – lots of it. We felt there was HUGE risk, with limited rewards in going head-to-head against another, well funded newspaper organization, so why do so? Aim for the low hanging fruit.
Client “experience” decided it was worth the risk and that competition wouldn’t respond aggressively. And, that while the research was helpful and directional, it missed the mark. With the upside so large and the downside very limited, no real harm could occur. So, a new zoned product was launched with much fan fare and commitment of resources.
The early numbers were promising. However, competition responded – very aggressively. Early sales success, built on existing relationships, were soon curtailed and the revenue growth rate slowed and then declined. The entire enterprise was a loser from the start.
That was over a dozen years ago!
Just last year (limited downside, indeed!!) the plugged was quietly pulled. Our client decided the best growth potential was, you guessed it, in the area Belden originally recommended. Even today, there was less competition and more opportunity than the failed geographic target of a decade ago.
By no means is this a “we told you so” exercise. Research isn’t always right. Sometimes it is only directional and management instincts and experience remain critical to any strategic thinking. But, no one questioned the experience, point-of-view of senior management. The culture didn’t not invite discussion or debate, even in the face of significant differing opinion. Most importantly, no one questioned the “comfort zone” – even one that was hemorrhaging dollars and cents for many, many years. Isn’t that remarkable? Good people in a very good company really prefer NOT to lose money, but they would NOT balk the system and do something “uncomfortable”. Sounds a lot like a little ole Texas company named Enron, doesn’t it??
Research will NOT always tell you what to do. Sometimes it is every bit as important to know what a company or an individual shouldn’t do, anyway. Yet, it can serve as a guide…a compass to direct strategic and even tactical approaches. But, research guided initiatives or those driven by experience and instincts MUST be evaluated before, during and after to make sure there is an acceptable return on investment (capital or per FTE or whatever success metric applies). If and when that isn’t the case (and, it WILL happen to every enterprise at some point – is it happening right now??) someone has to sound the alarm!! Loudly. And, management has to be secure enough in its confidence to recognize one of the old business maxims continues to apply – it’s amazing how much can get accomplished, if you don’t care who gets the credit?!
Good luck examining and breaking out of those “comfort zones” – let us know how we can help!!
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