Eric Schmidt, the innovative CEO of
http://Google.com/ who keeps his group of wizards on their toes 24/7, was never in the US Army, but he sure knows how to execute the war games
Sander A. Flaum
"We operate as if [on] a train with three of four wheels off the rails," he says. "There's little in the way of corporate
hierarchy. Everyone wears several hats. The speech I give every day is: 'This is what we do. Is what you are doing consistent
with that, and does it change the world?'"
Google exemplifies how far a company can go to win a stronghold and maintain it, building an effective strategy to stay on
top—and ever changing to outsmart and stay ahead of its competitors.
Strongholds set the standard—in terms of products, price, performance, and reliability—for competitors to challenge. That
challenge can be formidable, thanks in part to unexpected moves by the competition.
Earlier this year, we saw Toyota surpass reigning market leader General Motors and venerable Ford, the model of American manufacturing
ever since it invented the assembly line. Ah yes, Ford Motor Company. A quick aside to note that innovation requires more
than lip service: In TV ads that ran from 2005 to 2006, former Chairman and CEO Bill Ford, obviously not a war games proponent,
used the word innovation about once every eight seconds, branding innovation as "the compass that guides this company going forward." Within months,
Ford suffered a record loss of $12.7 billion, in no small part because Toyota totally outmaneuvered Ford with its real-life
innovations. It moved into the Ford stronghold step by step, adding innovative capabilities, resources, and momentum along
the way. Toyota began with small cars (not a priority for Ford at that time), then moved to luxury models, and finally zeroed
in on core profit zones for US manufacturers: SUVs and trucks.
Knowing your competitors' history and anticipating their next move is key to successfully invading a competitive stronghold
and defending one's own. If "invading" conjures up a military mode, it's intentional. Today's savvy business leader operates
from a virtual war room, where the focus on what the "enemy" is up to is as intense as it is on how to improve the bottom
line. How weak are your competitors' people? Are they suffering financial problems, distractions from potential layoffs? The
key: Avoid an overfocus on your own business and never stop being paranoid and opportunistic.
The military model extends to running "test flights" for new products and strategies by assembling a team of diverse thinkers
with varying points of view to evaluate which way to go. It may take courage to invite dissension and disparate ideas. But
it's far better than doing things the same old way, day after day—the surest way to invite enemy raids.
Here's a fundamental question for the war room: Do I grow, or do I grab a piece of my competitors' market share? There's no
magic bullet here, only different scenarios and different questions that can help determine the right way to go.
Ask: What might I yield and what might I repurpose to favorably reconfigure market share? It can be a tough call! Lowe's and
Home Depot seesawed when trying to secure specific market segments. Initially, Home Depot targeted do-it-yourselfers used
to shopping at construction-supply stores while Lowe's focused on women and created a mix of the retail and warehouse looks.
Since then, each has made inroads into the other's turf, blurring the differential.
Bic and Gillette suffered years of costly price wars competing for market share of cigarette lighters and disposable razors
before Gillette abandoned lighter sales to concentrate on its successful launch of the Sensor cartridge razor. Within a year,
Gillette had captured two-thirds of all razor sales and further differentiated its stronghold in cartridge razors from Bic's