Tag Archives: organizational fitness

Ran Out of Gas

“I haven’t heard from you in a while,” I said. “I assume it’s because everything is going swimmingly with your efficiency process.”

“Yes, yes,” Duncan replied. “I’ve been meaning to call you, but we have been so busy. Frankly, I was hesitant to call, because the efficiency process has stalled. But, we have been so busy that we haven’t been able to focus on our metrics. We haven’t even collected our metrics in over a month. If we want to look at our efficiency trends, we likely will have to start over.”

“What does your gut tell you?” I asked.

“My gut says we got a little busy one week and fell behind. Then we got busier and our metrics lost their priority. Now, we are so busy, the project is off the rails.”

“Do you see any connection between your busy-ness and the loss of focus on your efficiency project? There was a guy driving from Chicago to Florida, on a tight deadline. He ran out gas. Said he didn’t have time to stop to refuel.”

What’s Local Anymore?

“So, it’s important to be Number One or Number Two in our market. I get that. Third or Fourth place just creates a target. Can we use geography to narrow our market definition? I mean, as a local supplier, we have an advantage. We can honestly say that we are Number One in our local market,” Gene explained.

“Yes, if your market is truly a local market. But, Gene, I gotta tell you, I have seen some trucks rolling around town from a new competitor I haven’t seen before,” I replied.

“Yeah, I know who they are. Their headquarters are on the other side of the state. They don’t do any local advertising. I think they are depending on the internet to get their leads. They show up pretty heavy in search engines. But, still, they’re from out of town.”

“Gene, I visited their yard. They don’t have an office, but they have six trucks in your local market.”

Living Off the Crumbs

“Yes, we have a couple of competitors, big competitors, but they pretty much leave us alone. We’re much too small in the market to be more than a thorn in their side,” Gene explained.

“So, as the overall market contracts and the Top Competitors‘ revenues get pinched, where do you think they will go, to hold on to market share,” I asked.

“Well, we always hope they will fight with each other,” Gene continued.

“Why would the Top Competitor in the market fight with Number Two when they can just come in and take out Number Four or Number Five?”

Gene sat up in his chair, suddenly uncomfortable. “Well, Number Four would be us. And they have always left us alone. After all, we just pick up the crumbs that fall off of their cake. Why would the Top Dog want to come after us?”

“Why would the Top Competitor want to spend a lot of money, energy and resources fighting with Number Two, when they can take your customers without a whimper?” I asked again.

I could see Gene’s eyes tracing this chess game in his mind. “Look, Gene,” I continued. “In any market, when times are good, it’s easy to be Number Four, living off the crumbs. But, when the market gets tight, the only place to be is Number One or Number Two. Number Three and Number Four will have their heads handed to them.”

Undergrowth

2 Replies

“It’s strange,” Byron said. “A couple of years ago, we were on top of the world. We were the industry leader, now, with COVID and supply chain issues, things are tightening. You just never know.”

“So, this was not predictable?” I asked.

“No, our growth curves just showed, no turning back. I mean, it wasn’t hockey stick growth, but continued growth just the same. We just didn’t think we would ever have to pull in our horns.”

“So, Byron, what’s the purpose for a forest fire?”

“What do you mean? How can a forest fire have a purpose?”

“From an ecological sense?”

Byron thought for a minute. “I have heard that when a forest becomes choked with undergrowth, a fire can clear it out. Though it appears devastating, that’s what brings on new growth.”

“What could that tell us about business cycles?” I probed.
“Sometimes the market gets overgrown and has to be cleared out?” Byron tested.

“Yes, in fact, if you look at macro economic climates, you will see very distinct cycles. Occasionally, there has to be a clearing of the undergrowth. So, what if you looked at your own internal business cycles, within your own company. What do you now see?”

Byron pondered. “I see that, as we grew, some of the things we created weren’t good for the long term health of the company. They seemed like a good idea at the time, but, perhaps, we were just creating undergrowth.”