Category Archives: Strategy

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Ancient Advice For Modern Business

Niccolò Machiavelli lived in the late 1400’s in Florence Italy. He was a true renaissance man who has been called the father of modern political science. He was a historian, politician, humanist, writer, diplomat and philosopher.  He was also the author of Il Principe which was translated into English many years ago and is still widely available electronically and in hard copy as The Prince.

Although Machiavelli was “characterized by a duplicitous interpersonal style, a cynical disregard for morality and a focus on self-interest and personal gain1” (and this description is quite complementary compared to some of the other things written about him), I was curious about his writing as it is often quoted in modern business literature.

So, I recently spent some time reading The Prince and discovered that it was similar to the torture we were subjected to in high school when we were forced to read Shakespeare!

Besides the old English prose, there was a lot in the text which I didn’t agree with. However, there are some interesting points that I think apply to today’s business.

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Why Does Your Business Exist And Why Should We Care?

“That which costs little is less valued.” Miguel de Cervantes

 

In today’s world of hyper-connectedness and hyper-competition, it is really easy to yield to pressure and lower the prices for your products or services so that you can win the “super strategic” project or order. The problem with going down this road is that you now have set a new price expectation or ceiling on your prices. In effect, you have told the marketplace that your services or products are really not worth what you’ve been asking in the past.

A great example of this would be MP3 players versus iPhones or iPods. The first MP3 players sold at a premium because they were a new product with a new and growing market. But it wasn’t long before other electronics manufacturers saw the opportunity, created competing products and the price wars began. MP3 players had become a commodity.

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What Boats Should You Be Burning?

History tells us that when Alexander the Great invaded Persia, he burned his ships upon landing on the shores of Persia and then told his men if they wanted to go home they would have to go home in Persian ships. This provided significant motivation to the Greek soldiers and they fought hard and conquered the Persians even though they were far outnumbered. This same strategy was repeated on the shores of Mexico in 1519 by Hernan Cortes with his small army of 600 Spaniards. Turns out Cortes also won this war and conquered Mexico. It is amazing what motivated people can do!

Now, I do not recommend burning boats or vehicles or other modes of transportation in today’s world. However, metaphorically speaking, you need to ask yourself what boats have carried your business to some distant shores and now need to be burned so there is no way back? In other words, what mission critical initiatives were rolled out in your organization that did not get 100% buy-in from your staff because you allowed old behaviors or tools or processes to continue?

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Is the Price of Oil Collapsing or Recovering?

This is the million dollar question for those of us living in Alberta, Texas, Norway, Russia or any other area that is heavily dependant on the price of oil and gas! Will the price of oil collapse further or begin to recover? Seeing the price of oil stuck floating between $40 and $50/barrel is painfully frustrating. As leaders in businesses that depend on a strong oil market, we want to see the price of oil rise above $75/barrel so that our business can begin to grow and flourish like they were over the last 5 years. And, we would like to understand how quick this recovery will happen so we can better position our companies for this recovery.

I recently did a Google search on “collapse of oil prices” and it returned 24.1 million search results. I then did a search on “recovery of oil prices” and Google returned 52 million search results! So, who is correct?

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The Science of Success

I recently read Charles G. Koch’s book “The Science of Success” and I love the way he reminds his readers what a real business is and how it can succeed. I can summarize this with two brief quotes from the book;

“In a true market economy, we can only prosper by providing others with what they value.” Charles G. Koch

“People benefit themselves by benefiting others.” Alexis de Tocqueville

A business or organization or individual will prosper by giving others what they value. The business or organization or individual will not prosper by trying to sell others a product or software that is not needed, not valued or not fit for purpose. People exchange their hard earned money for something that they value at least as much or more than the money they are parting with. It is a very simple but often overlooked concept!

So, as business leaders, how do we know what others value?