authority up and down the organization, and a true zest for growth.2
That competitive ideology shapes how the company communicates with employees, customers, and even investors. Whole Foods has issued a “Declaration of Interdependence” that will never be confused with the bland, generic-sounding mission statements that most companies paste on cubicle walls and forget immediately. The Declaration, which was developed in 1985 and revised in 1988, 1992, and 1997, is a richly worded, painstakingly crafted document that is both aspirational and candid.
Indeed, the statement ends with the rare (and refreshing) admission that the company, like any organization, doesn’t always live up to the ideals it espouses. The Declaration “reflects the hopes and intentions of many people,” it reads. “We do not believe it always accurately portrays the way things currently are at Whole Foods Market so much as the way we would like things to be. It is our dissatisfaction with the current reality, when compared with what is possible, that spurs us toward excellence and toward creating a better person, company, and world.”
Companies that think differently about their business invariably talk about it differently as well. What language does your company speak?
3. Are you prepared to reject opportunities that offer short-term benefits but distract your organization from its long-term mission? At every company we’ve explored in these first two chapters, the road to prosperity has been determined in part by the road not taken—choices not to pursue markets that looked seductive but were at odds with the company’s advocacy agenda, decisions to turn down customers who could pay the bills but didn’t fit the strategic bill.
Scott Bedbury, a marketing wizard who played a key role in brand-building for Nike and Starbucks, and whom we’ll meet again in chapter 8, likes to say that some of the best moves he ever made were the growth opportunities he passed up. He calls it the “Spandex Rule of Branding,” and it applies to strategy as well as marketing: “Just because you can doesn’t mean you should.”
The Spandex Rule helps to explain why ING Direct passes on business opportunities that would make traditional bankers salivate. It explains why Craig Newmark and Jim Buckmaster of Craigslist are determined to keep looking for reasons not to charge visitors, even though the site’s devoted users, both buyers and sellers, are certainly prepared to pay for some services. It explains why Southwest Airlines has never adopted some of the most common practices of its rivals.
“The ‘invisible’ decisions that you make to stay on purpose can be ten times more important than your visible decisions,” argues Roy Spence. “Nothing’s more difficult than saying no to an attractive opportunity. And nothing’s more important.”
4. Can you be provocative without provoking a backlash? One key test of any would-be disruptor is whether he or she can also be a convincing diplomat. That insight may be the most enduring contribution of the rise and fall of Netscape, the company that single-handedly defined the revolutionary fervor of the dot-com boom. Eventually, waving a red flag at Bill Gates and his colleagues is Redmond, Washington, forced Netscape to wave the white flag as an independent company.
Even a fire-breathing maverick like Arkadi Kuhlmann appreciates the virtues of diplomacy. Not with his competitors, mind you, but with his colleagues. After all, ING Group operates in many of the businesses that Kuhlmann loves to critique, from home mortgages to credit cards. So he is careful to reassure his Dutch brethren that he’s a team player as well as an industry reformer. Back in the 1990s, when he launched ING Direct Canada, Kuhlmann named the conference rooms at bank headquarters after Dutch villages—a symbolic gesture that received a warm welcome in Amsterdam. Indeed, Kuhlmann’s diplomatic skills are so well developed that when Fortune surveyed the parent company’s American presence, it concluded that the operation that felt most Dutch was ING Direct USA.3
5. If your company went out of business tomorrow, who would really miss you and why? We first heard this question from advertising maverick Roy Spence, who tells us that he got it from strategy guru Jim Collins. Whatever the original source, the question is as profound as it is simple—and worth taking seriously as you evaluate your approach to strategy and competition.
Why might a company be missed? Because it’s providing a product or a service so unique that it can’t be provided nearly as well by any other company. Because it’s created a workplace so dynamic that most employees would be hard-pressed to find a similar environment somewhere else. Because it has forged a uniquely emotional connection with customers that other companies can’t replicate. Precious few companies meet any of these criteria—which may be why so many companies feel like they’re on the verge of going out of business.
HBO is not one of those companies. In today’s 500-channel cable universe, it’s hard to argue that TV viewers would be left staring at blank walls (or, gasp, reading a book) if HBO were to disappear from the small screen. But one vital constituency would suffer irreparable harm—the ever-growing collection of writers, directors, actors, and producers who believe they have no other outlet on television for their most daring work. “They say, ‘We want your voice. We want your vision. We want the story that you see.’ And they mean it,” marvels Six Feet Under creator Alan Ball. “That might seem obvious, but at the networks every decision is second-guessed by every single executive. At HBO they leave you alone for the most part and trust your instincts.” (Instead of returning to film after Six Feet Under went, well, six feet under, Oscar-winner Alan Ball has re-upped with the network on two major projects.)
Forget HBO’s programming library and technology strategy. The network’s hardest-to-duplicate advantage (and thus, the piece of its business that would be most sorely missed) is its ability to attract and unleash Hollywood talent that once shunned TV. “People always fixate on the content freedoms at HBO as a kind of unfair advantage,” says Carolyn Strauss, a network lifer who is president of HBO Entertainment, “but the freedoms that are really important aren’t the freedom to swear, or to be naked, or to blow somebody’s head off. They’re about expressing a distinct point of view and allowing the creator’s voice to come through in as unencumbered a way as possible.”
Those freedoms, carefully guarded by the network’s leadership team, are why some of the world’s biggest stars and most-respected filmmakers—from Paul Newman to Tom Hanks to Mike Nichols—bring their passion projects to HBO. Albrecht understands that there is a “limited supply of supremely talented people who can create successful television,” and that most of them “have a better chance of getting rich and famous elsewhere.” So he focuses on making the experience of working with HBO memorable—the kind of experience that writers, directors, and actors would miss if it went away. “If you’re interested in the work itself,” he says, “there are very few other places in the broadcast business where you can call your own shots as a creator.” These creative freedoms are an essential part of HBO’s competitive strategy.
Can you identify one piece of how your company operates that, if it were to disappear, would be sorely missed in the marketplace? If not, can you identify one good reason why your company is not at risk of disappearing?
NOTES - CHAPTER THREE
MAVERICK MESSAGES (I): SIZING UP YOUR STRATEGY
1. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen (Harvard Business School Press, 1997). See also The Innovator’s Solution: Creating and Sustaining Successful Growth by Clayton M. Christensen and Michael
