Strategy Revolution – Guest Contributor, Robert Cannon

revolution management

Forbes has published a review of Roger Martin’s “Fixing the Game” . I have since read the book itself and consider this a seminal work in the area of leadership and management strategy. It harkens back to the theories of Peter Drucker and Michael Porter, whose focus was on the purpose of a firm or company. That is, the main purpose is to create and service a customer.

The review points out a fundamental weakness in our current financial incentive world. For public companies it’s all about managing earnings and expectations. For private companies, it’s an overemphasis on the shareholder. The best public companies have avoided the managed earnings trap, but they are few. I think mostly of Apple, who’s leadership (not just the departed) focuses fiercely on the customer, and not simply on what the customer thinks they need (no market research here), but rather on what they really want (but just don’t know it yet). Translating this to the private market, the focus of the firm needs to be on serving the customer in the best way possible, and only then will profits follow. The more recent focus on maximizing shareholder value (a term called the “dumbest in the world” by no less a titan than Jack Welch) should not be the driving force. Incentives are OK, but they must be tied to customer-related goals as well as profitability.

I would recommend the book on its own merits, but remember as the leader of a small company you must try to keep the focus on your customer and you will succeed. Just bring in a good financial mind to incentivize the workforce and count the beans.

Robert Cannon is a principal at Cannonomics Inc.

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2 Responses to Strategy Revolution – Guest Contributor, Robert Cannon

  1. Pingback: Strategy Focus – Guest Contributor, Rob Cannon « SMB Matters – Small and Medium Business Blog

  2. Pingback: Strategy Focus – Guest Contributor, Rob Cannon | SMB Matters Blog - SMBMatters.com

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