Planning Thoughts for CEO's - Cars and coffee - what can be learned?

by Robert M. Donnelly

However, if the CEO and their team take their eyes off the prize and start to market by assuming that they know more than their customers, they are usually surprised by the unanticipated results. It's a well known business fact that if the customer gets to the future before you do they will leave you behind. 

Obviously then, any management team needs to develop the ability to perpetually interpret the pace, direction, meaning and significance of what's happening in their marketplace. Because once you stop and get lulled into a false sense of security, usually as a result of current profitability, it is easy to become a victim of your past success. 

The hubris of success has been the demise of many CEO's, and the decline and eventual death of historically well known brands. 

Today especially, changes in technology and customers requirements are refashioning markets and shaking up company's long held positions. Relentless innovation is the best defense. What can we do faster, better or cheaper, because if we don't do it somebody else will! 

Innovation has become so commonplace that scarcely any new product survives long enough to age. 

What can be learned from two recent examples in cars and coffee? We've been watching one major mistake after another for years now by one of the biggest and the best, once upon a time - General Motors. What were all the CEO's and management teams thinking and studying for all those years? It couldn't have been their customer's requirements. 

They took a nineteen year trip to nowhere with the Saturn brand, once a real winner, and have lost money for twenty years after acquiring the Saab brand, a loser from the start. Saab is actually going to rack up another $400 Million loss for this year, and may be GONE by year-end. 

How about Starbuck's, another great company with a wonderful value proposition - "to build a company with soul to inspire and nurture the human spirit". However, once the visionary founder Schultz stepped down his management team promptly started to market by assumption, watered down the brand and became just another fast food outlet. 

Now they are trying to play catch-up and are at the mercy of the $1 coffee boys (McDonald's and Dunkin Donuts) with a $4 cup of coffee image. What were they thinking? 

Lesson: It's about the customer, not the product!

----------------------------------- 

Robert M. Donnelly is the Editor of the online Entrepreneurial CEO column for Chief Executive Magazine. His column is broadcast monthly to thousands of CEO's across the country and read by many more globally. He is the author of Guidebook to Planning - A Common Sense Approach to Building Business Plans for Growing Firms, available on Amazon.com and Barnes & Noble online. An educator and coach to entrepreneurs and CEO's of growing firms, Bob is a frequent speaker at conferences and executive briefings. He is also affiliated with NYU's Stern Graduate School of Business in their Center for Entrepreneurial Studies. Earlier in his career he held executive positions with IBM, Pfizer and EXXON. He can be reached at: rmdonnelly@chiefexecutive.net 

Cerius RSS Feed

Top 8 Reasons Why Leadership On-Demand Makes Economic Sense Today

Featured Paper

We're Here To Help

Find The Right Solution
Contact Us