Is Dumb the New Smart?
How dumb is your business? At the risk of drawing the ire of corporate elitists, I submit to you that the dumber your business is, the better off you are. The truth is that great companies are those which can thrive and prosper in the absence of sophistication. As odd as it sounds, businesses that are not dependent on smart talent, capital, or technology can scale faster and easier than those businesses burdened with the aforementioned dependencies. In today’s post I’ll share why I believe dumb is the new smart…
The simple truth of the matter is that if your business requires smart money (which equals expensive money), or your competitive advantage is tied to a superhero key employee, or your business is built around maintaining a technology advantage, you have more weakness in your business model than you do strengths.
Let’s drill down on the talent argument a bit deeper. I’m not suggesting for a moment that you don’t want to hire tier-one talent. However I am clearly stating that you don’t want to be dependent upon tier-one talent. Talent is clearly a plus as long as it is a value add and not a business requirement. If your company’s long-term business plan requires the acquisition, or retention of the uber-employee then your business not only has a risk management issue, but it is likely not scalable. If your company can’t be operated by mere mortals, you need to reexamine your business logic. Here is a simple rule of thumb…the bigger the key man policy the less scalable the company is.
The dumb factor not only applies to talent, capital, and technology, but it also extends throughout the entire value chain. It applies to your branding, marketing, supply chain, and ultimately to your customer base. If your customer has to be a rocket scientist to understand your value proposition you have problems. If your employees cannot simply and effectively explain what you do you have problems.
The last point I want to cover is that of growth as it relates to dumb businesses. Both scalable and non-scalable businesses can achieve growth and sustainable success. However it is important to understand the distinction between the two. While a business cannot scale without growth, a business can grow without being scalable. If your business model requires implicit customer growth your business might grow for a time period certain, but it isn’t scalable.
The moral of this story is that while sophistication and complexity often go hand-in-hand, they don’t have to be synonymous. Focus on driving-down the most complex tasks to the lowest levels of the organization, and then leverage with talent, capital and technology while avoiding the creation of margin eroding dependencies.
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Mike Myatt, is a Top CEO Coach, author of “Leadership Matters…The CEO Survival Manual“, and Managing Director of N2Growth.
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Hello,
I covered the same thing in much smaller way on the Power of Dumb. Often times dumb ideas have at their heart a real problem to address. Exploring the idea down to the meaning of the idea can uncover something new. Since the method of getting to the idea was unique the resultant idea and it’s application is unexpected.
Nice WordPress theme. I’ll have to look for a variant on it.
Great stuff.
The need to develop a business model that doesn’t rely on a single SuperHuman extends all the way to the top of the organization, too. A CEO or President who demands adherence to his/her way of doing things without gathering input from others is creating an organization with a short lifespan, too. At all levels, if the organization doesn’t fail as a whole, it most certainly will experience a series of inefficent and demoralizing shoscks as each successive change in leadership creates a new period of turmoil.
You’ve also highlighted the need for leadership development and successive planning: sustainability.
Thanks!
Don’t believe it for a second. Microsoft didn’t grow to its current size by being dumb. Neither did Intel. In less technical businesses, where it might seem like being dumb could help, being smart also helps. Wal-Mart was able to scale and grow because they collected and used (in smart ways) information about their suppliers (and fed that back to them), their prices, their point of sales data, and their competitors. Others, such as Scott, the lawn products company, beat the competition because they have tremendous knowledge about the climate and weather and their supply chain is optimized to deliver the right products to the right stores at the right time. Unless you deal only in commodities, you need innovate or lose market share, as competitors develop products that are better than yours. Innovation requires intelligence about your potential customers, your own capabilities, and, often, technology.
Don’t believe it for a second. Microsoft didn’t grow to its current size by being dumb. Neither did Intel. In less technical businesses, where it might seem like being dumb could help, being smart also helps. Wal-Mart was able to scale and grow because they collected and used (in smart ways) information about their suppliers (and fed that back to them), their prices, their point of sales data, and their competitors. Others, such as Scott, the lawn products company, beat the competition because they have tremendous knowledge about the climate and weather and their supply chain is optimized to deliver the right products to the right stores at the right time. Unless you deal only in commodities, you need innovate or lose market share, as competitors develop products that are better than yours. Innovation requires intelligence about your potential customers, your own capabilities, and, often, technology.
I actually think this is good food for thought. I disagree with Steven (but understand his line of thought) in the concept that the posting is actually fully applies to organizations such as Microsoft, Intel and Wal-Mart as they grew to not rely on key individuals, but spread their knowledge across functional groups. The “dumb”, which I would say is the wrong word to use, is encompassed with crisp marketing and being able to explain their value proposition in a manner which is easily understood by their customers. In my opinion, dumb does not apply to your technology or intellectual property, but it applies to how you provide that information to your customers and prospects for digestion. If it is easily understood, you are good, if you find yourself having to explain, in great detail, why they need your product, you have issues.
In my world, I tend to prefer to think of the message and product being “crisp” as opposed to “dumb”. However, that’s just my opinion.