Urban planning community

+ Reply to thread
Results 1 to 4 of 4

Thread: Leaders in an industry or field

  1. #1
    Cyburbian michaelskis's avatar
    Registered
    Apr 2003
    Location
    Someplace between yesterday and tomorrow.
    Posts
    12,101

    Leaders in an industry or field

    In the book Good to Great, author Jim Collins provides a detailed analysis on what make a good company step up and become the best in their industry or field. In his book, Built to Last, he explains what companies need to do to stay there. Interestingly enough, his ideas are not his own, but based on extensive research and analysis. They not only showed extensive growth, but they changed the way commerce or processes happen.

    For example, at one point the Ford Motor Company was the best in their industry, not just because of the product that they made, but it was how the product was made. Other car companies would assemble a car at a time and Henry Ford implemented the assembly line. He did not invent it, but he took two ideas and brought them together with inter-sectional innovation. This resulted in a good, dependable product at a low price. Steve Jobs did the same thing with I Tunes. He took the music industry and the computer industry and negocieated with record executives while the Napster hearings were going on. He explained that this is the way future music will be bought and sold, and they agreed. Once again, parts of two industries became one. But in both cases, they did not step outside of their specialized areas too much. There was a ton of projects that Steve Jobs scrapped when he went back to Apple in an effort to get back to basics.

    But how do we determine what is the best company in a field or industry, and do we know how they got there? For example, what would you say is the top company in the Planning Industry. Do they do more than just write master plans and zoning ordinances? I know it is not my company since for right now, it is only me, but I also keep in mind, every company starts someplace. Additionally, I don't think the biggest or most profitable company is the best, although market share has quite a bit to do with it.

    What about other industries? What do you think is the best computer company, the best book store, the best car company, the best restaurant chain, or the best retail company.
    Not my monkey, not my circus. - Old Polish Proverb

  2. #2
    Cyburbian Coragus's avatar
    Registered
    May 2002
    Location
    The Bluegrass Region . . . for now
    Posts
    1,024
    It's been a while since I read those books, but I think Collins was judging "best" by their financial track records. If you're trying to objectively evaluate a product, that seems to me to be the best way to gou about it.

    Now, subjectively, there's no way I'd say Ford is the best car company. Why? My dad was a 35-year GM skilled trades retiree and to this day, I still get the GM employee discount on a new car!

    Think about beer too. I believe that Anheiser-Busch is the highest grossest beer company in the United States, but they also tend to make gross beer. My definition of "best" would probably be the dark brew at a local (to my work anyway) brew pub.
    Maintaining enthusiasm in the face of crushing apathy.

  3. #3
    Cyburbian wahday's avatar
    Registered
    May 2005
    Location
    New Town
    Posts
    3,801
    To offer another angle on this, I heard a Planet Money (great show and you can download them as podcasts for free) that was about industry and innovation in America. It was pretty fascinating as they visited two US based producers of goods and compared their ability to compete in a changing marketplace.

    The first was a button factory. The button, as you might imagine, has changed very little over the past. Its actually thousands of years old and its pretty much the same today as it was then. So, innovation in the design and function of buttons is not where a company finds their edge. Its all about how many you can produce in a unit of time, your rate of “mistakes” and the cost of materials. The guy they interviewed had been the world button king in the 1970s. He was the exclusive supplier for Jordache and many other big name brands. But over time, others developed an edge, under sold him, and he has not had the capital to invest in machines that would keep him competitive. He is phasing out the business as Chinese companies with amazingly productive machines take over.

    The second example was a guy (an immigrant to America from an East European country, underscoring the importance of immigration in fueling American industry) who makes the little connectors that link processors and other electronics to circuit boards. This is an area of tremendous, rapidly changing innovation as the energy transfer demands, heat buildup and other factors are constantly changing. The edge in this industry is all about developing new and better performing products that respond to electronics innovations as well as your ability to design, manufacture, and get them to market. The owner said currently he needs to have one great idea for a new product that is put into production annually to stay competitive. He expects that will have to double in the next 3 years just to remain viable.

    So, determining the “best” is going to be at least partly informed by these two dynamics – increasingly streamlined and cost effective production of a product that changes little but is needed vs. fast paced innovation for new products to serve evolving and rapidly changing needs (the most obvious here being computers). Ever since I heard this story, I see this dynamic everywhere. Apple is all about innovation (though some would question, in the wake of the suicides and other problems at Chinese plants, at what cost) but Smith Barney makes money “the old fashioned way” which is to say, they are emphasizing that they are staid, tried and true and not just going with current market trends. And there are so many other examples.

    “Best” also needs some definition, of course. Some will look at total cash revenue and be done with it. Others will consider externalities like environmental footprint. Others will consider employee benefits, advancement potentials, or support of the communities in which they operate. How about the degree to which a company pays out executives versus paying more modest CEO salaries and plowing money back into R&D or employee pensions? Depending on what kind of company you are, these decisions will have big impacts on future success. The American car industry, for example, has been criticized for not fueling enough innovation, in part because they are a somewhat protected industry (foreign companies pay significant tariffs to sell their products here, reducing their advantage as a more affordably produced product. As a result, they have focused a lot on innovation to create a market edge). The critique is that the American car manufacturers really didn’t have a healthy enough fear of competition to drive innovation and continue to lead the industry and I think there is a lot of validity to this argument.

    There is a lot to consider.
    The purpose of life is a life of purpose

  4. #4
    Cyburbian michaelskis's avatar
    Registered
    Apr 2003
    Location
    Someplace between yesterday and tomorrow.
    Posts
    12,101
    Quote Originally posted by wahday View post
    To offer another angle on this, I heard a Planet Money (great show and you can download them as podcasts for free) that was about industry and innovation in America. It was pretty fascinating as they visited two US based producers of goods and compared their ability to compete in a changing marketplace.

    The first was a button factory. The button, as you might imagine, has changed very little over the past. Its actually thousands of years old and its pretty much the same today as it was then. So, innovation in the design and function of buttons is not where a company finds their edge. Its all about how many you can produce in a unit of time, your rate of “mistakes” and the cost of materials. The guy they interviewed had been the world button king in the 1970s. He was the exclusive supplier for Jordache and many other big name brands. But over time, others developed an edge, under sold him, and he has not had the capital to invest in machines that would keep him competitive. He is phasing out the business as Chinese companies with amazingly productive machines take over.

    The second example was a guy (an immigrant to America from an East European country, underscoring the importance of immigration in fueling American industry) who makes the little connectors that link processors and other electronics to circuit boards. This is an area of tremendous, rapidly changing innovation as the energy transfer demands, heat buildup and other factors are constantly changing. The edge in this industry is all about developing new and better performing products that respond to electronics innovations as well as your ability to design, manufacture, and get them to market. The owner said currently he needs to have one great idea for a new product that is put into production annually to stay competitive. He expects that will have to double in the next 3 years just to remain viable.

    So, determining the “best” is going to be at least partly informed by these two dynamics – increasingly streamlined and cost effective production of a product that changes little but is needed vs. fast paced innovation for new products to serve evolving and rapidly changing needs (the most obvious here being computers). Ever since I heard this story, I see this dynamic everywhere. Apple is all about innovation (though some would question, in the wake of the suicides and other problems at Chinese plants, at what cost) but Smith Barney makes money “the old fashioned way” which is to say, they are emphasizing that they are staid, tried and true and not just going with current market trends. And there are so many other examples.

    “Best” also needs some definition, of course. Some will look at total cash revenue and be done with it. Others will consider externalities like environmental footprint. Others will consider employee benefits, advancement potentials, or support of the communities in which they operate. How about the degree to which a company pays out executives versus paying more modest CEO salaries and plowing money back into R&D or employee pensions? Depending on what kind of company you are, these decisions will have big impacts on future success. The American car industry, for example, has been criticized for not fueling enough innovation, in part because they are a somewhat protected industry (foreign companies pay significant tariffs to sell their products here, reducing their advantage as a more affordably produced product. As a result, they have focused a lot on innovation to create a market edge). The critique is that the American car manufacturers really didn’t have a healthy enough fear of competition to drive innovation and continue to lead the industry and I think there is a lot of validity to this argument.

    There is a lot to consider.
    I agree 100% with everything you said. Much like Ford, the button guy was a leader in the industry and their successes might have also been the beginning of their failures too. It is also a classic example of how business need to grow and change to adapt to new technology and cultural needs.

    I think that being the best would be a combination of things ranging from % of market share, name brand recognition, implementation of innovations to change the industry, quality of product or service, and adaptability to changing market needs.

    As an example, McDonald's would meet that conscription in the US. I don't care of the quality of the food, but they are the industry leaders in franchise fast food because of their duplicatable systematic processes in each store, but that too is always changing.
    Not my monkey, not my circus. - Old Polish Proverb

+ Reply to thread

More at Cyburbia

  1. Leaders and Managers
    Friday Afternoon Club
    Replies: 16
    Last post: 22 Nov 2012, 2:46 PM
  2. Replies: 14
    Last post: 24 Jul 2009, 2:42 PM
  3. Replies: 11
    Last post: 25 Oct 2005, 7:12 PM
  4. Replies: 11
    Last post: 01 Jan 2003, 11:40 AM