Are You a Leader in Denial?
More than 10 percent of U.S. companies disappear annually -- often owing to their leaders' denial that consumer needs are changing. Henry Ford failed to notice in the late 1920s that consumers wanted more from a car than transportation; theywanted status. His denial gave General Motors a chance to seize market share. In the 1970s, with oil expensive and stagflation rife, the Big Three automakers denied that consumers wanted reliable, affordable transportation, not gas-guzzling status symbols. So the Japanese swept in with precisely what Americans wanted.
To stay ahead of competitors, understand that every product or service has a primary purpose (in a car's case, transportation) and secondary purposes (e.g., enjoyment, status). The border between the two inevitably shifts over time, depending on what's happening in the economy and society. Detect when it shifts, and you stand a better chance of offering consumers what they want.
Today's Management Tip was adapted from "Leaders in Denial" by Richard S. Tedlow.
May 22, 2009; 9:00 AM ET
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