By the Numbers?
I had dinner with an old friend and talented consultant about a week after he started a new assignment. We ended up talking past one another.
He'd spit out nonstop statistics, demonstrating how his client wasn't keeping up in this or that market segment, etc. Then I'd interrupt with something like, "But who's doing something interesting in the industry? Didn't I read about a weird new product that ... ?"
In short, he's a "quant jock," as we used to call the numbers fanatics at the consulting firm McKinsey & Co. I'm a "cases" kinda guy, who wants to know "who's doing something neat."
Both approaches are important. (In fact, my training is mostly on the "quant" side, and to this day I pride myself on so-called hard skills.) Still, I worry—a lot—about folks who instinctively go for the nums and ignore the odd way the real world unfolds. That's especially true these days, when, by the time you've got "it" (whatever) pinned down quantitatively, the market's hurried off in another direction.
In his book The Whiz Kids, which chronicles the postwar transformation of Ford, author John Byrne writes, "The Whiz Kids became architects of a new economic order that valued analysis over experience, numbers over intuition, fact over emotion"—and which eventually led Ford and others down the drain. Of course, leading whiz Bob McNamara also led us down the drain in Vietnam by sticking with his body count "algorithm" as the real world crumbled round him.
While Ford has been able to shed some of the "Numbers R Us" culture that got it into trouble, hyperrationalist power may be waxing again. Newly named CEO Alex Trotman told Toronto's Globe & Mail, "I have never bought a car in America, and I don't see why I should do that. I know a lot of dealers, and I don't see why I have to buy a car to get in touch with the dealer-customer relationship."
Is this guy for real?
James Womack, MIT professor and premier student of the automobile industry, was not surprised by Trotman's loony comment. "Nobody in a car company ever buys a car, nobody in a car company ever has to maintain a car, nobody in a car company has to do much of anything (about their cars)," he told the Globe & Mail disparagingly.
In her new book, Collision, top auto-industry analyst Maryann Keller assesses the three most powerful global auto industry players—Volkswagen (No.1 in Europe), Toyota (No.1 in Japan and Asia) and General Motors (our own No.1). Though a towering quant jock by profession and reputation, she turns to decidedly qualitative criteria when peering into the future: (1) "awareness of problems," (2) "strong company vision," (3) "adaptability to circumstances," and (4) "understanding the product and the consumer."
Then there's the late Steve Ross, who, during a larger than life career, went from minor funeral home operator to creator of Time Warner. He told author Connie Bruck, "Numbers speak to me. But very little of (Time Warner) is about numbers. It's about people, really—realizing what they want." In fact, Bruck reports Ross was at least as distinguished by his ability to massage the egos of his temperamental talent pool as he was at ferreting out the secret meaning from a balance sheet.
Back to my pal the consultant. He's working with a packaged-goods company which has lost its edge to private-label purveyors. He's calibrated when and how fast they've lost out. But I'm drawn to a recent Financial Times analysis of consumers' eroding loyalty toward brand-name products.
The paper claims the private labels now equal the brand names in product quality and often have more and better information about consumer trends. That is, the big guys are no longer special. The obvious answer: Get special. Most of the dominant consumer-product manufacturers that have lost their edge are lamenting customer disloyalty, then doing more of what they've always done or copying the copycats who've copied them.
Most of us understand that to stand out in the market is to astonish the consumer with surprising offerings. But where do "astonishment" and "surprise" fit into the numbers nummies' calculations?
The marketplace is crowded beyond belief these days. And standout products are very few and very far between. So how do we get there from here?
Don't eschew the numbers. But do look for cases of folks from hither, thither and especially yon who do things differently. Don't fire the chief financial officer, but, if you're an auto boss, do go out and buy a car from a real dealer.
Truth is, reading Ford CEO Trotman's quote (in effect, "Who needs the real world?") set me back 15 years. I thought we'd wised up. Maybe not.
(C) 1993 TPG Communications.
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