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Achieve the Critical Mass |
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Apply force at the decisive place and time. |
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By concentrating in four product areas and acquiring over 80 companies, Dennis Kozlowski, chief executive of Tyco International, raised market capitalization from $2 billion to $30 billion in six years. |
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Organizations like Ingersoll-Rand and United Dominion Industries who have been diversified are successfully focusing their strengths on three or four key business sectors. |
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Many companies who thought they were in the computer hardware business have been beaten by companies who understood the importance of being in the software business. Witness the rise of Microsoft compared to the erratic success of IBM. |
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For years, one of the major buying decisions of gasoline station owners was which brand of gasoline pump to buy. Then, the emerging gas station/convenience store needed merchandise sales recorded through a software system. The gas pump buying decision became secondary to the more important software buying decision that provided inventory and sales information. |
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Strategic initiatives must focus on the critical factors that give you a competitive advantage. When you have a unique enough advantage, you should be able to get 100 percent of the market. |
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The critical mass is simply the concentration of energy required to achieve success. What counts is not only the strength of resources, but the speed with which it is delivered. That energy concentration can be in any facet of the organization; for example, purchasing, production, marketing, distribution, etc. Sara Lee, whose products are number one or two in every category, is concentrating on marketing. It is a cake company without ovens, a merchandiser of Hanes hosiery without knitting mills, and a seller of Ball Park franks without processing plants. |
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The story is told about the person who was trying to convince his friend to gamble. He said, "Give me five reasons why you don't want to gamble." The friend replied, "The first is I don't have any money." Back came the response, "Forget the other four!" Indeed the critical mass was money. |
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In business as in nuclear fission, a concentration of energy must be attained to achieve the critical mass. The manager must focus his or her energy on assuring performance of the tasks most critical to success. |
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