By Lloyd Graff.
This is a story I love to recount to friends about how to look at a business. Harry Quadracci, founder of the immensely successful printing company, Quad/Graphics, allowed competitors to come in every year to see what it was doing, giving away best practices and the current secret sauce. He believed that by showing competitors the newest best stuff it was doing, the company would be forced to take the next steps to get better. In 40 years, the company has grown to 25,000 employees with printing facilities on three different continents.
I get both amused and angry when accountants and analysts make judgments about the health of a business by parsing the “numbers.” As if the numbers truly describe a company.
I’d like to point out some of the critical things the numbers do not necessarily illuminate.
1) The strength of the brand. And related to that, the company’s reputation. Do people refer clients to the company? Does it have name recognition in the industry? Is the company more than the work coming through the door? Is there an ongoing stream of work, or is every job a new bid?
2) The quality of the people. I’m talking knowledge, reliability and integrity. Do the employees not only know how to do their jobs, but also have the ability to cover for coworkers? Do they come in early and stay late to get the job done? Are they loyal, or constantly looking for a better offer?
3) Is the company creative? Is it trying new things, or is it satisfied with doing things the way they’ve always been done? Is the company willing to fail at something new? Does it have the courage to reach?
4) Is the company the standard that others are compared to? Is it one of those that people are referring to when they say, “Ok, they’re good, but they are not (fill in the blank).
5) Does the company believe in itself? Is it a company that continually invests in the future, or does it suck out the cash for other uses?
Question: Would you invite your competitors to an open house?
Absolutely not! Why would anyone show their direct competitors how they do things? So they (the competition) can get to where you are without doing the work and research?
Japanese companies like NipponDenso, Toyota, Honda etc. force this practice within their supplier groups and those who are ahead of everyone else and have done the work too improve their processes resent it greatly!
I couldn’t agree more! Every business has to be more than just “the numbers”. To grow and succeed you must think in these terms every day.
Yes and we have several times. Just because someone sees your process doesn’t mean they can or are even willing to duplicate it.
Just a tour? . . . We like to make things a little more interesting, forcing us to stay ahead of the pack. While guiding the tours and veiwing our brand new peice of custom designed equipment, we hand out detailed drawing and the vendor list with cost breakdown. We also provide the contact information for our key employees that wrote the inovative robotic programming that reduces cycle times fifty percent. At the end of the tour, all attendees get complete list of our customer contacts and all negotiated pricing. . . . We are that good. 😉
Not only have I had competitors in my shop, I’ve even sold them machinery and repair parts. They insist their process is better. I just smile and nod. Most of their secrets are revealed when I go to their closing auction.
I’m still here and most of them are not. I must be doing something right.
B&S Forever!!! Or at least until I run out of repair parts…
Done right it might be worthwhile.
If you work for an outfit that enjoys success do to various innovations the very human tendency is to rest on your laurels. For as long as possible. Too long. Long enough for your hungrier competitors to out-innovate you and leave you in a catch-up position if not flat on your ass.
So letting some of your competitors have access to some of your trailing edge, rather then cutting edge, innovations might help build a fire under your own people. If they know they can’t rely on yesterdays solutions, successful though they be, they’ll be looking for tomorrow’s solutions.
To paraphrase Norm, it’s a dog-eat-dog world out there and we’re all wearing Milkbone underwear.
I would not invite a competitor in to one of my plants. In my industry (oil and gas), clients are very risk sensitive and new technology requires extensive (years) and expensive (millions of $) testing before a new technology is accepted. Once accepted, the technology retains value (measured by price premiums) for 10 years. While our technology is not easily copied, I would rather delay the erosion of technology value by a few years than accelerate it.
Don’t forget that Harry also built and sold print machinery to the competitors, QuadTech. He was also a great man to work for!