Compressed Air Best Practices - April 2008 - (Page 41)

Compressed Air Industry PLASTICS BLOW-MOLDING | 04/08 | Strategic? 1. Create Differentiation Differentiation for competitive advantage in business has its roots in science. In 1934, Professor G.F. Gause published the results of a landmark study. In the study, he placed small animals in a bottle with an ample amount of food. If the animals were of the same genus and a different species, they were able to live together peaceably. However, if the animals were of the same genus and the same species, they were not able to coexist. This led to the Principle of Competitive Exclusion, which states: No two species can coexist if they make their living in the identical way. Open the newspaper and read about the struggling companies — it’s a good bet that one of the reasons they struggle is because they fail to pay heed to the Principle of Competitive Exclusion. They are stuck doing the same things in the same way as their competition. Jeffrey Immelt, Chairman and CEO of General Electric, has written, “GE must look different…act different…be different…to excel in the years ahead.” Notice he didn’t write that GE must be “better.” He specifically chose the word “different” and used it three times to emphasize his company’s understanding that the road to success in business is paved by differentiation from the competition. What do Johnny Cash and the Mini-Cooper automobile have in common? Johnny Cash didn’t have the best singing voice and the Mini-Cooper isn’t the highest performance automobile on the market. However, they have both been remarkably successful, not because they were “better,” but also because they were different from their competition in ways their core customers valued. Strategic leaders are continually asking two questions: What activities are we performing differently than the competition? What are the similar activities we’re performing in a different way than our competition? 2. Focus Resources Focus demands that we have the discipline to allocate resources to specific areas and activities, rather than spread them evenly across the business. Focus comes from the ability and willingness to make tradeoffs. Tradeoffs are about choosing one path and not the other, and they involve incompatible activities — more of one thing necessitates less of another. In most industries, one can choose to be the leader in researching and developing new products or the leader in providing low-cost goods, but cannot do both without bearing major inefficiencies. Making tradeoffs is one of the most difficult tasks for most managers, and the result is that they rarely do make the necessary tradeoffs. Instead, they hedge their bets and abide by the adage of “trying to be everything to everyone.” Therefore, good leaders cannot afford to be like Farmer Brown. In the morning, Farmer Brown hops on the tractor and spreads fertilizer evenly across the crops in hopes that everything will grow. Strategic leaders don’t spread their resources evenly across the business in hopes that everything will grow as well. If they do, their business will ironically end up in the same condition as Farmer Brown’s fertilizer. Strategy is as much about what you choose not to do, as it is about what you do. Focus requires tradeoffs and tradeoffs require risk. Those leaders not willing to take risks will never make it to the top of the strategic summit. Two questions to begin thinking in terms of focus: What potential offerings have we chosen not to provide to customers? Which potential customers have we chosen not to serve? www.airbestpractices.com 41 http://www.airbestpractices.com

Table of Contents Feed for the Digital Edition of Compressed Air Best Practices - April 2008

Compressed Air Best Practices - April 2008 Contents From the Editor Utility-Air News The Compressed Air Audit of the Month: Minimizing Blow-Molding Pressure Fluctuations AF Compressors: Focused on 40 Bar, Oil-Free Air for the PET Industry Real World Best Practices: PET Plants Using Boosters for High-Pressure Air Guaranteeing Audit ROI for Blow-Molders Managing Vacuum Pressure Differential Are You Taking Full Advantage of Pneumatic Valve Technology? Are You Strategic? Resources for Energy Engineers: Training Calendar & Product Picks Wall Street Watch Advertiser Index Job Market

Compressed Air Best Practices - April 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.