The pitfalls of power: Are you vulnerable?
A leading category manager who purchases a $4 billion category of business shared with me during a recent interview that he believes less than 5% of the companies calling on him “truly create meaningful value” and actually “get it.” He went on to share that, “they don’t understand or appreciate my definition of value.”
If you were to ask each of the leaders of the 50 companies that call on this buyer, if they created value, their answer would be “yes.” Most organizations that enjoy even moderate levels of achievement are vulnerable to the pitfalls of success. Recently Booz & Allen shared the three reasons why organizations get tripped up:
Assuming the present looks like the past
Ignoring the advice of peers
Failing to recognize changing nuances
This ‘trifecta’ is a dangerous combination because the future doesn’t look like the past, it takes real leadership strength to seek advice from others, and it takes discipline and objectivity to look for changing nuances in the context of business. In other words, to create value we must all be open, vulnerable to others ideas, and very astute. Not easy in a busy world.
My Category Manager friend reminded me that the best organizations embrace both talent and mindset because they understand that the “who” matters, as much as the “how.” Great teams encourage honest & healthy dissent; attract great talent while also creating the freedom for leaders to be wrong, without serious ramifications. They encourage opposition and don’t punish failure.
Organizations that don’t encourage open mind-sets and critique are vulnerable to demise, and they are not even aware of it. Companies that don’t objectively assess their customer relationships and can’t admit deficiencies are vulnerable to competition. Even if you believe you understand how you are perceived by your customers, research shows that most people are not fully forthcoming and want to avoid confrontation.
Here are a few of the symptoms prior to a fall:
Often pride and an inward focus take center stage with leaders and their teams.
Success often minimizes the creative tension necessary for break-through & innovation.
Momentum often breeds lack of questioning, limited learning and the loss of an edge.
A fall can occur when growth is the core focus of an organization, versus a vision that is transcendent & compelling to society and the employees.
Becoming hardened to change, not wanting to give up control or thinking you’ve arrived brings on risk and vulnerability. On the other hand, successful companies never lose their identity and often keep the passion of a challenger brand.
In contrast, open minded organizations (the winners) are very conscious of the following principles:
The healthiest organizations remain humble, agile, curious and open to informal advisors. They don’t have to be right, to be successful!
They do not allow defeats to crush them; instead they become even more inquisitive.
They encourage dissenting voices, and reward opposing ideas without risk.
They are always pressing in, listening and co-creating with their core customers and partners.
Remember, if you have been winning (and I hope you have), you’re in dangefr and could be more vulnerable than you think. To avoid a fall, stay open, encourage dissent, and look for outsiders to help you see how you can elevate your game.
Dan Mack is founder of the Mack Elevation Forum and a partner in The Swanson Group. To learn more go to www.mackelevationforum.com.
Hi Dan Many good words of advice. But remember it's a two-sided coin.I have met category managers who think they alone have the right formula or their company has the only true path. The buyer/seller relationship is about compromise not about who is right or who gets it MJ
Family Dollar Stores Q2 sales up 17.7%, but CEO expresses discretionary income concerns
MATTHEWS, N.C. — Family Dollar Stores on Thursday reported a net sales increase of 17.7% to $2.9 billion for the second quarter ended March 2. Comparable stores were up 2.9%.
An extra week in the quarter contributed approximately $189 million in sales. Strong growth in tobacco, food and HBA contributed to a 26.6% lift across consumables, the dollar operator reported.
“Our continued market share gains reflect the successful execution of our strategy to become more relevant to customers,” stated Howard Levine, chairman and CEO. “This quarter we delivered positive results despite financial pressures that continue to challenge our customers," he said.
Levine expressed concern around the discretionary dollars of the shoppers patronizing Family dollar. And the weak economy and a cold spring is still proving a challenge, Levine added. "Unfortunately, the unanticipated delay of the 2012 tax refunds impacted our results at the end of January and the beginning of February. We were happy to see sales trends improve towards the end of the quarter as our customers began to receive their tax refunds," he said.
“Given this uncertainty, we have adjusted our plans to reflect lower than anticipated home and apparel sales as our customers’ discretionary spend is expected to remain constrained," Levine concluded.
Family Dollar shares were down 1.1% to $59.78 in late afternoon trading.
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March sales down 2% across Fred’s Super Dollar
MEMPHIS, Tenn. — Fred’s Super Dollar on Thursday reported total sales of $190.4 million for the five weeks ended April 6, down 2% from the comparable year-ago period.
Comparable store sales for the month decreased 3% compared with flat store sales in the same period last year.
"We expected that March general merchandising sales would be adversely affected by unseasonably cool weather and the timing of the Easter holiday, both of which affected two of our key reconfiguration departments — lawn and garden and seasonal," stated Fred’s CEO Bruce Efird. "The pharmacy department continued to produce strong comparable script growth, but that was offset by the ongoing brand-to-generic shift, which resulted in lower overall pharmacy sales — a trend that we will see throughout most of the year," he added. "We are optimistic about April sales as the spring seasonal sales kick in and our operational expense initiatives take hold. All of these factors were anticipated as we developed our guidance for the first quarter."
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