It's Not Luck (23 page)

“Still two I think.”

“And if in one market we could look at it as two groups of clients, where the only difference between them is that one group has, on top of all the UDEs of the other group, some additional UDEs of their own? What then?”

“It’s interesting how you’re distinguishing between markets, according to their UDEs. But to answer your question, I still say two.”

Jim nods in agreement.

“I think it’s a mistake. Look at it this way. If we build only one tree, still distinguishing which group has which UDEs, we can adopt our offering to be comprised of two components. One that solves all the common UDEs and an additional component that solves the additional UDEs.

“From our point of view, since the changes are in the periphery and not in the physical product, we will tend to look at it as one product. But look from the eyes of the market. For the group with the additional UDEs the expanded offer is much more valuable. And they will be willing to pay a higher price.”

“Very smart, Alex. That’s how you generate the segmentation.” Jim seems pleased with my answer. Finally.

Brandon is still nodding his head, “Fascinating.”

I decide that the time has come to go for the throat, “So can I assume that my companies are off the hook?”

“You mean, that we should stop all activities to sell your companies?” Jim smiles at me.

“Yes. For the time being at least.”

“Alex, be realistic,” Brandon uses his patronizing tone again. “Your plan of action is very innovative, and we are all for it. But don’t tell me that you haven’t noticed the weakness.

“First, what guarantees that when you finish the analysis of the market we’ll not find that you and your competitors are already addressing the market’s core problem? Second, even when it turns out that you aren’t, what guarantees that you will be able to address the market’s core problem? Maybe it has nothing to do with your offering. Third, even if the core problem of the market relates to your offering, who said you will be able to implement changes that will affect it? Maybe the required changes are outside your control or require major changes in the product itself?”

Now I see why Brandon is in the powerful position that he is. I don’t think that I could grasp it so quickly. There’s definitely no way I’d be able to pinpoint, on the spot, all the weaknesses. That’s impressive.

“That’s not to say,” he continues, “that we think that you don’t stand a chance. You might succeed. The printing company is proof that sometimes it might work.”

“Are you willing to take the risk? If I have a chance to succeed and you don’t give me the time, you might be selling a gold mine for pennies.”

“We’re not taking any chances,” Jim explains to me. “Anyhow, in the next few weeks no major activities are scheduled. By then you’ll know if your scheme has a chance of working. Keep us updated. If it turns out that you can effectively address the core problem of a company’s market, we’ll know what to do. Remember, we didn’t have any problem adjusting to the success in the printing company. And we won’t have any problem handling any other such successes either.”

“No, we won’t,” Brandon assures me. “Just remember to keep us in the picture. Good work, Alex. Excellent work.”

No, it wasn’t a waste of time. Not the meeting and not the meticulous work that we did to develop the ideas I presented. Now it all depends on us. If we continue to use the Thinking Processes and implement the common sense conclusions that emerge, we’re bound to win.

I’m not afraid of the points that Brandon raised. They are not new to us, they were all spotted in the analysis. I think we have good ways to handle them all.

Doing the analysis wasn’t easy. Constructing logical trees is not fun, not glamorous, and the high points of discovery are buried in the gray background of “if-thens.” Don and I slaved for two whole days, using Jonah’s Thinking Processes to arrive at the, now obvious, conclusions. I remember, in great detail, how it went.

20

When I arrived, Don wasn’t there yet.

So I decide not to waste any time. I drag the flip-chart from the corner and flip until I find a clean sheet. From my pocket I take out a thick pad of post-its. On one I write, “The company sells all its capacity without reducing prices.” On another, “The company has an apparent, dominant, competitive edge.” I stick them at the top of the page.

“Nice objectives, good morning,” Don greets me as he enters.

“Good morning,” I answer, and start to write another post-it.

“Coffee?” he asks.

“Yes, please,” and I stick the post-it at the bottom of the page. I read it out loud, “ ‘The company takes actions that sufficiently increase the perception of value the market has for the company’s products.’ ”

“What is it?” Don asks. “The theme of today’s analysis?”

“In a way,” I agree, and take the cup he hands me. “It’s also the injection that I got from the cloud.” When I see his expression, I add, “I know that it’s not much, but this is our starting point.”

“This is what you call a starting point?” Don is surprised. “To me it looks more like an ending.”

“Let’s say that, at this stage, it’s more like wishful thinking,” I admit.

“What are we supposed to do with it?” He is not happy. “I thought that you’d come up with something more concrete. A real starting point. How are we going to construct a Future Reality Tree with this?”

Don does not have a lot of experience in constructing Future Reality Trees, especially when the starting point is wishful thinking.

“The same way that we always do,” I try to cool him down. “We’ll start with this injection and, using. if . . . then . . . arrows, we’ll try to reach these two objectives. We’ll use additional statements that are correct even now, and, if necessary we’ll add more injections, until we reach the objectives.”

“More statements, more injections? Come on Alex, with such a starting point I can reach the objectives no sweat. But what’s the point? The result will not be a Future Reality Tree, it will be a Future Fantasy Tree! How are we going to reach what you call the starting point? That’s the real problem.”

“I know. And you know that I know. So stop fussing around and let’s do the formal connection to the objectives.”

“But, Alex,” he continues to argue, “if we don’t have even a clue how to achieve the injection, if it’s only a pie-in-the-sky, does it make any sense to continue?”

“Yes, it does,” I firmly say. “Before we rack our brains finding out how to achieve it, first we should know if we want to, if it will do the job. I’m not as sure as you are that this injection, by itself, is sufficient to reach our objectives.”

“But. . . . ”

“If it’s as simple as you say, why are we arguing? Let’s just do it.”

“I guess that it makes sense to see the total picture before slaving on the details.” Don is not overly enthusiastic.

“If, ‘The company takes actions that sufficiently increase the perception of value the market has for the company’s products,’ ” I say, starting to build the Future Reality Tree, “then, ‘The perception of value the market has for the company’s products is higher than the current prices.’ ”

“Why do you claim it?” Don is aggressive.

“Because of the word, ‘sufficiently.’ How would you interpret the words ‘sufficiently increase the perception of value’ if it isn’t increased above the current price?”

“I see what you are doing,” Don’s frowning face starts to clear. “Through constructing the Future Reality Tree you hope to gain more understanding about your injection.”

“Exactly,” I say. “And if Jonah is right, it should give us a detailed understanding. So detailed that we’ll know how to accomplish it.”

“Good idea,” Don smiles. “Can I continue?”

“Be my guest,” I hand him a post-it pad.

He writes another note and reads, “If, ‘The perception of value the market has for the company’s products is higher than the current prices,’ then ‘The market doesn’t have any quarrel with the company’s requested prices.’ ”

“Good,” I say, “but not good enough. This still doesn’t guarantee a competitive edge.”

“Right,” Don agrees. “The market might not have any quarrel with our prices but at the same time it might have even less of a quarrel with our competitors’ prices. You’re right, we’ll have to add another injection. Something like, ‘The perception of value the market has for the company’s products is higher than the perception it has for the competitors’ products.’ This will give us a competitive edge.”

“Considering that we have to reach a ‘dominant competitive edge’ I suggest you change ‘higher’ to ‘much higher.’ That will take care of it.”

“The paper suffers all dreams,” Don mutters as he corrects the injection. “Now it looks like we can connect to one of our objectives: ‘The company has an apparent, dominant, competitive edge.’ I told you that it would be too easy.”

“Don,” I patiently say, “you addressed ‘competitive edge’ but you haven’t substantiated that this competitive edge is apparent. To do that you have to prove that our market share grows.”

“You are right, I need both injections.” He is not impressed. “If, ‘The perception of value the market has for the company’s products is much higher than the perception it has for the competitors’ products,’ and ‘The market doesn’t have any quarrel with the company’s current prices,’ then ‘The company increases its market share.’ Now we’ve reached the point where the market prefers us over the competitors and as a result we increased market share. Is it okay with you to connect to the appropriate objective?” And he draws the corresponding arrows.

“Don, I think that you are being too hasty. I don’t think that you have established a dominant competitive edge.”

“What else is missing?”

“What guarantees that the competitors will not immediately copy our actions and wipe out our advantage?”

“I see.” He thinks for a minute. “I guess we’ll have to add another injection. Something like, ‘The actions the company takes are hard for the competitors to follow.’ ”

“That will do,” I agree.

When he finishes adding it to the tree, he says, “Based on the same logic I can connect to the other objective as well. ‘The company sells all its capacity without reducing prices.’ Okay?”

“No, it’s not okay, I think we have to add another injection,” and I hand him a post-it. “We have to make sure that we increase the perception of value in a big enough market or markets. Much bigger than our available capacity.”

He reads the post-it: “ ‘The market that the company targets is much bigger than our available capacity.’ No problem,” he sticks it on the big, white sheet and completes the tree.

“It’s very easy to formally achieve your objectives when you are allowed to use dreams,” he comments.

“Yes,” I laugh. “It looks like our injections will be real about the time that pigs fly. But, you must admit that so far we haven’t wasted our time. Now we know what’s needed. It’s not enough to increase the market perception of value to be above our requested prices, we also need to increase it to be much above the market perception of value for the competitors’ products. We need to do it in a big enough market, big enough to exhaust all our capacity. And we need to do all of it in a way that will be difficult for our competitors to copy.”

“That’s all? No sweat.” He tries to be sarcastic. “So now instead of one flying pig, we have four. This is what I call progress.”

“It’s not really four. The injections that we added are elaborating on the original one, they make it more explicit.”

“Not explicit enough, at least not for me,” he sighs.

“We haven’t finished yet,” I try to encourage him. “What we have to do now is use the real power of the Future Reality Tree, Negative Branch Reservations.”

“What good will that do?”

“It might help us trim the wings of these pigs.”

“If you say so,” he mutters, without much hope.

I copy the original injection, flip the page and post it at the bottom. I read it again, “ ‘The company takes actions that sufficiently increase the perception of value the market has for the company’s products.’ Don, what increases perception of value?”

“A better product.”

I know that we cannot afford it. This is the real reason why our injection seems to be a flying pig. But, according to Jonah, following this route is supposed to lead us to a practical solution. I hope he is right. Since I don’t have any other alternative, I take the time to write it properly.

Don reads what I write: “If ‘The company takes actions that sufficiently increase the perception of value the market has for the company’s products,’ and ‘The market appreciates better products,’ then ‘It is apparent that the company has successfully launched better products.’ The negative branch is obvious, it takes investments of time and money to launch a new product. Things that ‘we don’t have.”

“Correct, but we should write it down. If, ‘It is apparent that the company has successfully launched better products,’ and ‘It takes investments of time and money to launch a new product,’ then ‘It is apparent that the company has invested money and time.’ As you said, ‘We don’t have money and time,’ and thus the conclusion is, ‘We are replaced as the management of the company.’ Negative Branch, no doubt.”