Winning Moves Blog

A November 26-27 Wall Street Journal article described what Macy’s did to successfully run its day after Thanksgiving Black Friday sale based on knowledge. In my 25+ years researching business success and failure patterns, I have looked at how businesses use knowledge. The way Macy’s used knowledge about Black Friday fits patterns of business success that I find in my research. Thus, Macy’s made Winning Moves in its approach to Black Friday. And, what Macy’s did offers valuable lessons about the use of business knowledge.

Businesses succeed when they build on their strengths. Knowledge contributing to the understanding of the dynamics of the business is an important component of strengths. Formal market research studies are one source of knowledge, but they are hardly the only source. That’s why my March 2010 newsletter titled “Should Starbucks Do Market Research? Yes, But…” stresses the importance of paying attention to less formal sources of knowledge as well. Basically, knowledge can come from various sources ranging from extensive experience, to formal research methodology, to simply paying attention to what works and what does not.

Macy’s approach to Black Friday is an excellent approach to building knowledge. It incorporates a stepwise, evolutionary approach, which my research–and increasingly the research of others–finds associated with business success. It makes the effort to look for indications of what works and what doesn’t. And, what works is applied more broadly to the business.

Even back when opening at midnight for Black Friday was still rare, there were indications that it was very successful for the few who did so. In fact, I can personally attest to the fact that when the Premium Outlet Mall in Aurora, located on the far periphery of suburban Chicago, was one of the rare places opening at midnight for Black Friday, traffic on Interstate 88 approaching the mall was virtually at a standstill. Traffic backed up, not only on the exit ramp near the mall, but for a good part of the way to the previous exit, located four miles east, as shoppers approached the mall around midnight. Thus, Premium Outlets seemed to be doing well as an early adopter of midnight opening for Black Friday.

In the aftermath of the early adopters’ success, Macy’s tested its midnight opening for Black Friday. The Wall Street Journal article described what Macy’s did. Macy’s ran the midnight openings test last year in just six locations. Those midnight openings were both successful and informative. Then, after these early indications of success, Macy’s took its knowledge building a step further. It held a November 16 sale, so it could see what promotions worked best. In its knowledge gathering, Macy’s not only looked at which products were selling, but also at who was shopping. With this information from its pre-Thanksgiving sale, as well as with what it learned from last year’s six location test and from staying open 24 hours right before Christmas last year, Macy’s determined what promotions to run on Black Friday and who to target. As a result, Macy’s did very well on Black Friday.

Based upon my research into Winning Moves, what are the lessons from Macy’s Black Friday? Paying attention to what works and what does not, and applying what works in ways that fit your business is a Winning Move. The way Macy’s used this to target the teen market is also a Winning Move. Taking a stepwise, evolutionary approach, like Macy’s did, is a Winning Move. And, Winning Moves are what drive business success.

The book jacket of Great by Choice, the recent best-seller by Jim Collins and his co-author Morten Hansen, features four bullet points highlighting their latest surprising provocative findings. Their research findings, which are from a nine year study comparing a sample of great companies with not-so-successful companies, showed that companies become great as a result of the choices they make.

Speaking of choices, as you may know, the phrase “Strategic Choices for Successful Business Growth” appears on the banner of all my non-blog web pages and has been there now for almost five years. That’s because in my 25+ years researching business success and failure patterns in the moves made by companies, I have found that the right strategic choices lead to Winning Moves. And, as those of you who have been following my website for some time may know, many of Collins’ latest Great by Choice findings are what I have been discussing and advocating here on my website over the last several years. Thus, Collins’ research appears to confirm some of mine, though our methodology differs.

Not Too Much Risk, Less Innovation, Not Too Fast, and Not Too Much Change
In fact, as I explain below, Collins’ book jacket’s four surprising provocative findings bullet points parallel what I have been saying here on my website as a result of my research. His four bullet points cover risk, innovation, not acting too fast, and not changing too much–all of which have been major topics here on my website. So, if you want to better understand the provocative surprises in Jim Collins’ Great by Choice research, my material may help you.

Collins’ First Provocative Surprises Bullet Point–Risk
According to the first provocative surprises bullet point on Collins’ book jacket, the most successful companies are not the biggest risk takers. Again, if you have been following my material, you know that I’ve written a great deal about risk in my Winning Moves® reports and newsletter articles over the last several years. Based upon my research, my material emphasizes that success is associated with reducing risk down to more prudent levels, not with taking bigger risks.

My material on risk includes my January 2009 newsletter, which points out that high risk does not lead to high reward, and explains how even the greatest successes commonly attributed to high risk actually are not as risky as generally thought. For example, I point out that Richard Branson, known for his risk taking, reduces risk by always looking for ways to protect against the downside. This is essentially the kind of productive paranoia that Collins talks about.

In my July 2008 newsletter, I use my research about risk to explain how to interpret a University of Virginia corporate growth study’s finding that less risk was associated with greater success. Also, since my research finds risk reduction so important for business success, my November 2008 newsletter refutes the common wisdom that stagnating companies suffer from too little risk taking. My position is that these companies don’t need more risks, but merely need to stop stagnating and start evolving again.

Collins’ Second Provocative Surprises Bullet Point–Innovation
Another provocative surprises bullet point on Collins’ book jacket tells us that innovation is not the trump card. My report titled Evolution, Not Revolution: How to Innovate Without Destroying Your Company, which was on my website since early 2007, has a pull quote saying, “Innovation is not necessarily the key to growth that common wisdom often thinks it is.” My report also discusses how a so called revolutionary innovation only looks revolutionary to those who have not previously experienced it (this can include eventually disrupted companies specializing in older, pre-innovation technology). But, for those who actually work on developing the innovation, it entails several smaller evolutionary steps, not the revolutionary breakthrough that others may see. My discussion of this resembles what’s in Collins’ book, when he discusses Apple and points out that what looks like a big breakthrough is really a series of iterative steps.

Collins’ Third Provocative Surprises Bullet Point–Not Too Fast
Collins’ third provocative surprises bullet point, tells how moving too fast can kill success. Again, this parallels the position I have been emphasizing on my website as a result of my research, which finds that a more gradual, evolutionary approach leads to success. Yet additionally, my January 2011 newsletter points out that, while most successful evolutionary growth is slower, there are some rarer instances when relatively fast growth can be evolutionary and successful.

Collins’ Fourth Provocative Surprises Bullet Point–Not Too Much Change
Finally, Collins’ last provocative surprises bullet point says that successful companies change less in response to a radically changing world. Again, this reflects the evolutionary growth framework that I have been advocating as a result of my research. Throughout my website, I encourage gradual change and discourage huge leaps into new areas. Among the places I do this are my Evolution, Not Revolution special report and my July 2011 newsletter, which discusses Southwest Airlines. Yet, regarding Collins’ bullet point about changing less: it is important not to confuse the changing less that makes companies great with the barely changing stagnation that occurs when companies fail to evolve.

In summary, the provocative surprises bullet points on Jim Collins’ Great by Choice book jacket encompass what I’ve been pointing out for some time, based on my 25+ years researching business success and failure patterns. Since many of you will find Collins book of interest, I encourage you to read it. But, over the years, my material has been discussing these kinds of findings, along with their explanations and ramifications, as well as related areas. So, stay tuned to this Winning Moves® Blog for more of that to come.

Note: Phyllis Ezop, Ezop and Associates, this Winning Moves® website and blog, and the Winning Moves® reports and newsletters are not affiliated with Jim Collins.

What choices will you make for your business? What path will you choose to take?

The strategic choices a company makes greatly influence success. That’s why the phrase “Strategic Choices for Successful Business Growth” is on my website banner, and has been there since my site went live almost five years ago. Success comes from making the right strategic choices, which entails choosing the strategic moves that become Winning Moves.

Strategic choices are something that a company can control. This is attractive since external conditions may not always be controllable, especially in times of uncertainty. But, whether it’s success patterns from my research or from the findings of others, businesses can choose to follow the principles of success. They can do so regardless of what happens to external conditions. Often, these choices can successfully grow the business. Yet, when the business is hit by really dire times, the choices may merely pave the way for handling the challenges most effectively. With the right strategic choices, the business can bolster its performance to the best extent possible, despite the external conditions.

There are many strategic choices, such as choices about general business direction, choices about target markets, choices about how information and knowledge are applied, choices about innovation and risk, choices about how and when to change the business, and about how fast to grow. All of these can greatly impact how well the business performs. Thus, understanding what kinds of strategic choices succeed and why provides a business with major advantages.

Today, there is so much information available about what works and what does not. This knowledge can prepare you to make the right strategic choices that turn your strategic moves into Winning Moves. But, as I said in my previous blog post (which talked about going back to basics to revitalize a business), there is confusion out there about exactly how business success principles apply. So, I see a need for the kind of clarification and explanation I am providing in this blog. In fact, an example of the possible confusion about how to make the right choices surfaced in a post on yesterday’s Harvard Business Review Blog. That Harvard post expressed concern that Jim Collins’ latest best-selling book, which happens to be about choices, doesn’t pay enough attention to the principles of strategy guru Michael Porter.

According to my 25+ years of research, success comes from taking the kinds of success principles described by Collins (which, as those of you who have been following my website for quite some time may know, share some similarities with my findings) and making sure these principles are reflected in strategy. There are effective ways to do this. Yet, the Harvard post seems to overemphasize Porter, which may add to possible confusion about how to apply Collins-like principles.

It is important to break through the confusion and make the right strategic choices. That’s why this blog and website offer research based material to clarify what business success principles mean and how to apply them. As a result, you’ll be better prepared to make the right choices. And, you’ll also be better equipped to understand how to integrate the kind of material Collins produces (which does share similarities with my own research findings) with strategy.

In my previous post on this blog, I described how even well known business success principles can easily be misunderstood. I’ll use an example I recently came across to help illustrate this, since explaining and clarifying how business success patterns work is a major mission of my blog. The example comes from a recent Marketing News article about how the CEO of Gap plans to revitalize its brand by going back to basics.

Going back to basics can be an excellent strategy for breathing life into a struggling business. On the surface, going back to basics appears to be pretty straightforward, not something that would be easily misunderstood. But, although it looks like a simple principle, going back to basics may not always be as obvious as it seems.

The main reason going back to basics works is that it places a renewed emphasis upon a company’s strengths. Building on strengths leads to business success. Thus, a back to basics attempt at revitalizing the business generally will work only if it taps the strengths of the business. It will not work if it merely goes back to something in a company’s past that no longer has the potential to be a strength.

Revitalizing a business by going back to basics often entails returning to something the business has strayed away from, but was doing when it was previously successful. Or, it can involve something similar to what was once successful, or something that fits well with what made the business succeed. It may also involve building upon pockets of existing success in an otherwise troubled business. These kinds of approaches can often work well, unless drastic change (e.g., major new technology, new regulations) virtually destroys the back to basics opportunity.

Yet, going back to basics does not necessarily mean returning to what a company did or was at the time of its founding. Too much may have changed since then. Since companies generally evolve from their founding to more current times, what was a strength at the founding may no longer be a strength today. So, efforts to go back to basics must be shaped for today’s world if the business is to be successfully revitalized.

For example, Apple and McDonald’s are companies that were revitalized essentially by going back to basics. For Apple, this meant returning to its roots with a certain type of innovation at which the company was particularly strong. For McDonald’s, this meant concentrating more closely on its core business. In the process of revitalizing their business, neither Apple nor McDonald’s returned to what they were at the time of their founding. Instead, both returned to their basic strengths that had evolved over time.

This very same issue must be considered for the Gap example. The Gap was founded to sell jeans in 1969. Gap now has a line of jeans called 1969, named for the year of the company’s founding. The Marketing News article gives the impression that Gap’s move back to basics seems to be emphasizing that the company was founded in 1969 to sell jeans. The extent to which that can be a strength today will impact whether Gap can succeed, unless Gap also builds upon wherever else it can now be strong.

In conclusion, the lesson here is that even something as seemingly straightforward as going back to basics can be misunderstood. Success generally comes only when back to basics takes a company back to its strengths.

Although the recent economic environment may be tougher than in the past, businesses today have access to much better knowledge about what succeeds and what does not. So much more is now available about the principles of business success, not only here on this website, but also from other sources. This includes the information about business success and failure patterns that I have unearthed in my 25+ years researching Winning Moves. In addition, over the last several years, there have also been various research studies by academics and business gurus, some of which are related to or confirm my findings. And, all of this may be augmented by a company’s own information or its outside resources.

A considerable amount of the available information about business success was highly misunderstood as recently as fifteen to twenty years ago. Some of it has been misunderstood even more recently. And, there are signs that some of the available knowledge about business success is still not widely understood today. This can be the case not only for lesser known principles, but even for some of what has been popularized via media and best-selling books.

Sometimes, ambiguity can result when a study or book mentions a research finding, but doesn’t include an in-depth discussion of what it means. Thus, it may easily be misinterpreted by those who avail themselves of the information. Sometimes, people just have trouble applying the research findings in a setting far removed from the information source. Sometimes, a finding may be difficult to grasp when it goes against what people expect. Sometimes, by its very nature, a research finding has some underlying, yet not so obvious, complexities that can make it seem more ambiguous.

Thus, many factors can contribute to the ambiguity and lack of clarity about business success principles. So, as a result of factors such as the above, there seems to be a need for better examples and explanations of the principles behind business success. These kinds of explanations will not only present new perspectives, but will also go more deeply into clarifying what is already known so it can be applied more effectively.

And, there seems to be a real need for clarification. For example, an article may discuss a misstep a particular company made and say that the results were unpredictable in today’s environment of uncertainty. Yet, the misstep they describe is so typical of patterns that repeat themselves over and over again that anyone who understood the patterns would never have attributed the misstep to uncertainty. Those patterns have a high probability of repeating themselves. And, anyone paying attention to the patterns could probably have easily predicted the misstep. Still, the misstep was essentially considered uncertain and unpredictable in a relatively recent article in a prestigious publication.

That’s why, despite greater availability of information about business success, it appears that more examples and explanations would be beneficial. This website and the Winning Moves® Blog are designed to offer that kind of help by providing further explanations of available information about business success, as well as new insights. With those further explanations and with clarification of common misperceptions, the material here helps businesses apply all that information now available about the principles of success.