By Rob Linn
Playing to win as opposed to playing not to lose. You have heard that phrase before. In fact, you have probably heard it enough to consider it a cliché. But in your business environment it is not a cliché. The organizations that survive for years to come will make this their guiding strategic principle.
The objective is to continuously look for ways to create competitive advantage. For many organizations this requires that they start thinking differently than they ever have before.
For example, I was leading a series of strategic planning sessions with a large company. At a break in one of the sessions the CEO took me aside to express his frustration about the way his team was thinking. He said, “We have to find a way to get us to think like entrepreneurs. Sure, we are talking about important things like cost control, product effectiveness and customer satisfaction. But, we are being way too inwardly focused. We have to broaden our thinking. Nobody is thinking about how to grow. We are not thinking about how to take market share from our closest competitors. And we are certainly not thinking abut how we can move into new geographic or service line markets. If we stay on this track we will get steamrolled by our competitors.”
The objective is to continuously look for ways to create competitive advantage. For many organizations this requires that they start thinking differently than they ever have before.
To think the way this CEO wanted his team to think requires that you recognize that you are in a battle and then take the fight right to your opponent. A great example of this is a hospital whose CEO once described the organization as “a plane flying into the ground.” He recognized that his organization was under attack on three fronts.
Front #1 was an array of money losing ventures. Each of these ventures was started with the best of intentions. However, there was no discipline to the decision-making. If it seemed like an idea that no one could prove was a bad one it was launched. The CEO and his team analyzed each of these ventures. If they determined that it could not be turned around within a few months they shut it down.
He then implemented a disciplined and structured decision-making process to assure that his organization would never again threaten itself with poorly analyzed decisions.
Front #2 was the threat of a very deep-pocketed competitor buying market share all around them. This CEO recognized that while this competitor had lots of money their leadership team was disorganized and very inwardly focused. He saw a window of opportunity to significantly enlarge his market position. He capitalized on the opportunity by quickly acquiring two hospitals and two medical groups before his wealthier competitor got its act together.
He and his team then did the best job I have ever seen integrating these acquisitions into a new and more complex enterprise. But, I'll save that story for a future post!
That brings me to front #3. The largest health plan in the newly enlarged organization’s market was being very open about its intentions to significantly reduce contract rates. If this happened the organization would once again be “a plane flying into the ground.”
Many in the organization were resigned to this fate. They felt that the health plan was too big to fight and without that contract they would not have enough business to survive. But the CEO and some of his top executives saw things differently. They chose to go on the offensive.
They launched a multi-faceted effort that included:
- Direct negotiations with the health plan demanding increases that would boost net revenue by 10% or they would not contract with that health plan
- Enlisting political support within the government
- Direct meetings with business leaders to educate them on the importance of the contract increase.
- A media campaign to educate the public on the importance of the contract increase.
The CEO and his organization won. They got the full contract increase they were seeking securing their financial success for years to come.
There are two important things to take away from this story. One is to believe you can win. Do not resign yourself to slowly being squeezed out of business. You deserve better than that and so does your community.
Second is to act quickly once you see your opportunities. Fortune favors the bold!