The Discipline of Market Leaders: A Book Review by Bob Morris

The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market
Michael Treacy and Fred Wiersema
Perseus Books (1995)

The message of this important book is that “no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. Why and how this is done are the two key questions the book addresses.” The authors focus with rigor and precision on three different “disciplines”: operational excellence, product leadership, and customer intimacy. It remains for any company (for any organization, for that matter) to determine which of the three should be its primary discipline but all are obviously important…indeed interdependent. Nonetheless, one discipline should be pre-eminent.

The authors examine dozens of companies that have concentrated primarily on one of the three “disciplines” so that they can select their customers and then narrow their focus inorder to gain and sustain dominance within their respective marketplaces. I think this book will be of substantial value to executives in any organization but of greatest value to those in organizations that are small-to-midsize. Unless they have dysfunctional management and/or defective products, their mastery of that discipline will enable them to compete more effectively against larger organizations that (obviously) have greater resources available. My own view is that as B2B and B2B2C continue to increase at exponentially greater velocity, leadership of ANY market will require mastery of customer intimacy and at least one (but preferably both) of the other two disciplines. In that event, the insights which Treacy and Wiersema share will be even more valuable.

The authors maintain that there are three different types of “value discipline” that successful companies can adopt to command leadership in their markets. Which of these (if any) is taken by any particular firm depends upon the sort of product or service that they provide, and upon the organizational culture that they maintain. The book describes the philosophy and operation of these three value disciplines, and provides a detailed case study of a business that exemplifies the operation of each. The case study that the book uses to illustrate the operational excellence value discipline is AT&T’s experience in introducing the ‘Universal Card’, a combined long-distance calling card and general purpose credit card, featuring low annual fees and very customer-friendly service.

The second value discipline is product leadership which is dedicated to providing the best possible products from the perspective of the features and benefits offered to the customer. The company that the book uses to illustrate the ‘product leadership’ value discipline is Intel, and it describes in some detail how they are organized to encourage constant innovation. The third value discipline is customer intimacy, which involves the selection of one or a few high-value customer niches, followed by an obsessive effort at getting to know these customers in detail. This requires anticipating the target customer’s needs as well as (if not better than) they themselves do, and sometimes sharing risks with them when the development of new products or services is required.

The case study that the book uses to illustrate the operation of the customer intimacy value discipline is Airborne Express, and its special relationships with IBM and Xerox. Treacy and Wiersema maintain that, because of the focus of management time and resources that is required, a firm can realistically choose only one of these three value disciplines in which to specialize. Most companies in fact, do not specialize in any of the three, and thus they realize only mediocre or average levels of achievement in each area. These companies are in no sense market leaders. In today’ s business environment of increased competition and the need more than ever before for competitive differentiation, their complacency will not lead to increased market share, sales or profits. Rather, to their demise or acquisition.

How important is football to some people?

I came upon what follows in one of my electronic folders and have no idea what its source is. However, it does provide some insights into the mind of someone who loves football.

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#1. “Football is only a game.  Spiritual things are eternal.  Nevertheless, Beat Texas! “   Seen on a church sign in Arkansas prior to the 1969 game.

#2.  “After you retire, there’s only one big event left… and I ain’t ready for that.” – Bobby Bowden (Florida State)

#3.  “The man who complains about the way the ball bounces is usually the one who dropped It.’ – Lou Holtz (Arkansas)

#4.  “When you win, nothing hurts.” – Joe Namath (Alabama)

#5.  “Motivation is simple.  You eliminate those who are not motivated.” – Lou Holtz (Arkansas)

#6.  “If you want to walk the heavenly streets of gold, you gotta know the password, ‘Roll, tide, roll!’” – Bear Bryant (Alabama)

#7.  “A school without football is in serious danger of deteriorating into a medieval study hall.” – Frank Leahy (Notre Dame)

#8.  “There’s nothing that cleanses your soul like getting the h–l kicked out of you.”- Woody Hayes (Ohio State)

#9. “I don’t expect to win enough games to be put on NCAA probation.  I just want to win enough to warrant an investigation.” – Bob Devaney (Nebraska)

#10.  “In   Alabama, an atheist is someone who doesn’t believe in Bear Bryant.” – Wally Butts (Georgia)

#11.  “You can learn more character on the two-yard line than anywhere else in life.” – Paul Dietzel (LSU)

#12.  “It’s kind of hard to rally around a math class.” – Bear Bryant (Alabama)

#13.  When asked if Fayetteville was the end of the world:  “No, but you can see it from here.” – Lou Holt (Arkansas)

#14.  “I make my practices real hard because if a player is a quitter, I want him to quit in practice, not in a game.” – Bear Bryant (Alabama)

#15.  ‘There’s one sure way to stop us from scoring…give us the ball near the goal line.’ – Matty Bell   (SMU)

#16.  “Lads, you’re not to miss practice unless your parents died or you died.” – Frank Leahy (Notre Dame)

#17.  “I never graduated from Iowa, but I was there for two terms – Truman’s and Eisenhower’s.” – Alex Karras (Iowa)

#18.  “My advice to defensive players:  Take the shortest route to the ball and arrive in a bad humor.” -Bowden Wyatt (Tennessee)

#19.  “I could have been a Rhodes Scholar, except for my grades.” – Duffy Daugherty (Michigan State)

#20.  “Always remember… Goliath was a 40 point favorite over David.” – Shug Jordan (Auburn)

#21.  “They cut us up like boarding house pie.  And that’s real small pieces.” – Darrell Royal (Texas)

#22.  “Show me a good and gracious loser, and I’ll show you a failure.” – Knute Rockne (Notre Dame)

#23.  “They whipped us like a tied up goat.” – Spike Dykes  (Texas Tech)

#24. “I asked Darrell Royal, the coach of the Texas   Longhorns, why he didn’t recruit me and he said:  “Well, Walt, we took a look at you and you weren’t any good.” Walt Garrison (Oklahoma State)

#25.  “Son, you’ve got a good engine, but your hands aren’t on the steering wheel.” – Bobby Bowden (Florida   State)

#26.  “Football is not a contact sport – it is a collision sport.  Dancing is a contact sport.” – Duffy Daugherty (Michigan State)

#27.  After USC lost 51-0 to Notre Dame, his postgame message to his team:  ‘All those who need showers, take them.” John McKay (USC)

#28.  “If lessons are learned in defeat, our team is getting a great education.” – Murray Warmath  (Minnesota)

#29.  “The only qualifications for a lineman are to be big and dumb.  To be a back, you only have to be dumb.” – Knute Rockne (Notre Dame)

#30.  “Oh, we played about like three tons of buzzard puke this afternoon.” – Spike Dykes (Texas Tech)

#31.  “It isn’t necessary to see a good tackle.  You can hear it.” – Knute Rockne / Notre Dame

#32.  “We live one day at a time and scratch where it itches….” – Darrell Royal (Texas)

#33.  “We didn’t tackle well today but we made up for it by not blocking.” – Wilson Matthews (Little Rock Central   High School)

#34.  “Three things can happen when you throw the ball, and two of them are bad.” – Darrell Royal (University of Texas)

#35.  “I’ve found that prayers work best when you have big, fast, and talented players.” – Knute Rockne (Notre Dame)

#36.  “Gentlemen, it is better to have died a small boy than to fumble this football.” – John Heisman

Want to Be Successful? Don’t Play by the Rules

Here is an excerpt from an article written by Steve Tobak for BNET, The CBS Interactive Business Network. To

Steve Tobak

read the complete article and/or obtain a free subscription to one or more of the BNET newsletters, please click here.

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From the time we’re young, just beginning to understand what’s going on around us, until we’re too old to care anymore, one question comes up again and again. Should we play by the rules?

Now, I’m sure most of you are pretty opinionated. But before you answer yes, no, or it depends, consider this. You probably play by more rules than you think … or should. Some of them are even rules you impose on yourself, and for reasons you may not be aware of. Those are the ones that tend to be the most career and success-limiting.

You see, rules fall into three general categories: legal, societal, and self-imposed.

Legal rules are pretty black and white. America’s a nation of laws, and the rule is don’t break them. Just to be clear, we’re talking criminal and civil laws. That trips up a lot of people who mistakenly think fraud, discrimination, domestic violence, harassment, even downloading copyrighted material or rolling through a stop sign, are ethical or moral issues. They’re not.

Societal rules involve complex issues like ethics and morality, so they’re far more subjective than legal rules. Even if you feel strongly about one thing or another, there are likely circumstances that would change your opinion.

For example, I generally don’t fault people who cheat on their spouses, but I might feel very differently when the person being cheated on is someone close to me. Similarly, while I think people should treat others with respect, I know I fall short of that ideal all too often.

So, you can see how societal rules are subject to perspective and circumstance. These are rules that from time to time we may break, feel badly about, realize that we’re human, and ultimately forgive ourselves — even while those we harmed may not.

Now, let’s talk about self-imposed rules. They’re the kind of rules you hear again and again in every workplace. I hear them in many of your comments and emails, as well:

“I won’t compromise my principles to climb the corporate ladder.”
“I don’t play politics at work.”
“That’s outside my comfort zone.”
“Life is too short to work with a**holes.”
“I won’t work for a boss who, at a job where, or at a company that ___________ (fill in the blank).”

Now, we’ve all uttered a phrase or two like that at one time or another, right? Well, let me introduce you to a concept called self-limiting behavior. In this context, it’s when we put restrictions on ourselves that have unintended consequences because we’re not aware of the real reasons behind them.

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Recommended readings:

Hacking Work: Breaking Stupid Rules for Smart Results
Bill Jensen and Josh Klein

Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting From Evidence-Based Management
Jeffrey Pfeffer and Robert I. Sutton

Rework
Jason Fried  and David Heinemeier Hansson

Management? It’s Not What You Think!
Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel

Steve Tobak is a consultant, writer, and former senior executive with more than 20 years of experience in the technology industry. He’s the managing partner of Invisor Consulting, a Silicon Valley-based firm that provides strategic consulting, executive coaching, and speaking services to CEOs and management teams of small-to-mid-sized companies. Find out more by clicking here.

A rare opportunity….

Until now, unless you have subscribed to The Paris Review since its introduction in 1953 and have saved every issue since then, you could not have access to its archives that include lively interviews of great writers conducted during the last 60 years. Now it is possible to check out all of the interviews and other entertaining as well as informative resources.

Here are brief excerpts from a few interviews:

“The good artist believes that nobody is good enough to give him advice. He has supreme vanity. No matter how much he admires the old writer, he wants to beat him.” William Faulkner (1956)

“I don’t believe for a moment that creativity is a neurotic symptom. On the contrary, the neurotic who succeeds as an artist has had to overcome a tremendous handicap. He creates in spite of his neurosis, not because of it.” Aldous Huxley (1960)

“Who’s afraid of Virginia Woolf means who’s afraid of the big bad wolf . . . who’s afraid of living life without false illusions.” Edward Albee (1966)

“Fiction must compete with first-rate reporting. If you cannot write a story that is equal to a factual account of battle in the streets or demonstrations, then you can’t write a story.” John Cheever (1976)

“After my best friend jumped off the bridge, I knew that I was next. So—Paris. With forty dollars and a one-way ticket.”  James Baldwin (1984)

“I hate endings. Just detest them. Beginnings are definitely the most exciting, middles are perplexing and endings are a disaster.” Sam Shepard (1997)

On his writing process: 
“Occasionally, something sticks. And then I follow that. The only image I can think of is a man walking around with an iron rod in his hand during a lightning storm.” Arthur Miller (1999)

“Writing nonfiction is more like sculpture, a matter of shaping the research into the finished thing.” Joan Didion (2006)

Click here and check out the dozens of in-depth interviews and other resources in the magazine’s archives that have only recently become accessible.

FYI: Here are relevant videotaped interviews by Charlie Rose of or about Edward Albee, Arthur Miller, and Joan Didion.