It's Not Luck (36 page)

“I don’t remember. What were you talking about? Oh, yeah, you said that if you follow a good strategy, the market should never drop on you. What do you mean? When the market drops, it drops.”

“Precisely what they didn’t understand. Jim asked the same question, almost word for word.”

“I’m glad that I’m not the only dummy around you.”

“Jim is no dummy. Not at all. It’s only that people are so used to blaming external circumstances that at the moment cannot be changed, rather than blaming themselves for not preparing in advance. It’s like the cricket blaming the winter, while the ant is fed and warm.”

“Bringing it to a childish level doesn’t help me,” she laughs. “How can you prevent the market from dropping.”

“I cannot. But with a correct strategy, I can prevent the market of my company from dropping to the extent that there is not sufficient work for all of my employees.”

“How can you achieve this miracle?”

“Simple. By creating enough flexibility. One precaution is to make sure that every employee is serving not just one segment of the market, but many segments. Do you agree that if I plan my actions carefully it’s possible? For example, I can be careful to develop new products that require almost the same type of resources I already have.”

“I think it’s possible. But Alex, calm down, you don’t have to shout.”

“By the way, this is the opposite of what most companies are doing. To accomplish flexibility of the work force, you have to segment your market and not your work force. Do you know what they usually do? Even when the market naturally segments for them, a new market opens up, the idiots immediately open a new plant. They segment the resources. The exact opposite of what should be done under a sensible strategy.”

“Now it’s clear. But Alex, it’s already one in the morning and I’m dying to know what really happened. Just give me a shorter version. I promise that some other time you can tell me all the details.”

“Okay. Just the essence. I told them that there are two more things that a good strategy must be based on. One is that even in a market segment where we have a dominant competitive edge, we should not take the entire segment.”

“But, why? Oops, sorry. I didn’t say anything.”

“It will be immediately clear. The other thing is that the company must be careful to enter into segments for which the probability of many of them dropping during the same time period is very small. This last concept has far-reaching ramifications.”

“That I’ll be happy to hear about some other time. Now, what happened?”

I give up. It’s very difficult to tell somebody important things if she doesn’t want to listen.

“The conclusion is obvious. If a company does everything that we said, then when a lucrative segment is up, the company shifts their focus away from some less lucrative segments. They can do it because their resources are flexible. When a market segment goes down, the company shifts focus to other segments. Segments that they didn’t bother to fully exploit before.

“You see, the result for that company is that there is very rarely the need to lay off people. And all the three entities—the goal and the necessary conditions—are simultaneously satisfied.”

“Interesting. But what happened then? Tell me.”

“Oh, they were impressed. Much more than you are. Brandon even said I was full of good surprises. ‘I expected to hear some coherent view of how to strengthen the core business, but this is certainly beyond my expectations,’ he said. Did you hear that? . . . Beyond his expectations!”

“And what did Doughty say?”

“He just said, and I quote, ‘Passed with flying colors.’ ”

“That’s why you are so pleased? I thought that maybe you had done what you promised. That you asked them if they could help you find a good job.”

“Yes. I did.”

“And what did they say? Did they promise to help?”

“Not exactly. They looked at each other. Then Jim smiled and said that they definitely can help me find a good job. And Brandon said ‘How about being the next CEO of UniCo?’ ”

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