Is your company’s strategic objective to win? Or is your company’s strategic objective to maximize success?
‘Wait,’ you say. ‘Which is supposed to be better? And don’t you get one if you get the other? And why are you annoying me with these semantic quibbles anyway?’
Well, I think they may be semantic, but they’re real differences too. And no, if you get one, you don’t necessarily get the other. And yes, one is better than the other.
Let me explain.
Maximizing Success is Better than Winning
In the 2008 Summer Olympics, Jamaican Usain Bolt broke his own world record to win the gold medal in the 100-meter run. He did it while slowing down at the end, to celebrate.
Bolt won, but didn’t maximize his success (intentionally? He later broke the record again). Which suggests winning isn’t everything. The corporate version of holding back might be sandbagging, managing earnings, putting some cushion in the bank. Not necessarily a bad thing, though it could be.
But earnings smoothing is not nearly as big an issue as refusing to collaborate. The US auto industry, steeped as it was in the au courant teachings of competitive strategy, saw itself as competing with the UAW, with its suppliers, and probably with its dealers.
By contrast, Japanese automakers collaborated with their supply chain. And we all know who won that particular showdown.
It’s hard to prove causality here, though BCG partner Phillip Evans, who has written on collaboration, may be able to make the case. I believe it on principle. It’s simple. The entire lesson of the industrial revolution was that scale matters. He who gets scale wins.
Managing Scale is the New Scale
The thing is, “scale” used to be implicitly defined in regional and national terms. It no longer is. We’re facing a new industrial revolution where ‘scale’ happens globally. And when you need to outsource things radically and globally, it soon comes down not to who can cut the most deals, but who can manage them.
When you’re dealing with 500 suppliers in a few countries, and your competitors are doing the same, that’s one scenario. But add a few zeros to the number of supplier/partners you’re working with; make it dozens of countries, not to mention digital and in-transit locations, and the complexity gets quick fast.
The old way of doing things—winning—was based on solitary, siloed, vertically managed, so-called ‘industries’ of a small number of similar organizations. They ‘competed.’ He who won had the biggest market share, lowest costs, and highest profits. And the most success.
The new way of doing things—maximizing success—is based on amorphous (and morphing) agglomerations of supply chains, each similar in some ways and different in others, often competing in one area and collaborating in another. They don’t form neat ‘industries’ anymore. If they waste their time ‘competing’ with everyone, they will lose ground to other agglomerations who are far better at collaborating.
Playing together nicely in the sandbox is the new KSF. Hardball is out; team volleyball and pickup basketball are in. Jack Welch’s old term ‘boundarylessness’ is achieving new meaning—maybe GE thinks it still ends at the corporate boundary of GE, but other firms are applying it beyond the legal ‘firewall.’
Caution: competing is hazardous to your economic health. Even winning probably messed up your chance to achieve still-greater success by collaboration.
Teams always were capable of more than Lone Rangers; now the stakes are even higher.