By Jack Mixner
Always trust a friend. One of my friends, Bill Edwards of Edwards Global Services (http://www.edwardsglobal.com/) reminded me of a book that I had not spent much time with lately, Collins' Good To Great. The book adds significantly to an earlier text Built to Last. Examining companies that make it over the long haul, Collins suggests a relationship between:
· Being passionate about whatever your company does,
· Being best in the world at what you do and
· Being very profitable at the same time.
Collins discusses the success of Walgreen’s, a drugstore with margins that humble the rest of the industry. How’d they do it? Passion for them said be the best at what they do. They focused on convenient stores with high profit per customer visit. That meant smaller stores located close to the customer (Collins, page 92). When a location became available closer to customers they closed one store and moved, even if the move entailed paying off a lease and building a half a mile or so away. Stores were located close together to take advantage of economies of scale for deliveries. Then they added high margin photofinishing to increase profit per visit. Some stores have drive-up windows. What Walgreen’s didn’t do was buy small chains in less desirable locations just for increased revenues. They stuck with high profit per customer over increased revenues. Back to My Friend Bill Over more than twenty years, my friend Bill successfully launched operations for a large corporation in markets all over the world. Politics kept getting in the way and Bill decided to take a package, allowing him to recoup and decide what to do next. He realized that what he does best in the world is launch companies and products – worldwide. Another professional pointed out that Bill should apply his passion to an entrepreneurial venture, not employment at a large, international conglomerate. Today, his firm has locations in all the hot global markets, staffed by experts passionate at what they do. Customers come to them and ask for help. Bill’s team decides if they can help and if everyone – the customer and the Edwards team - will make out very profitably. They’ve got the passion; they’re the best in the world at what they do; they won’t take a project unless everyone makes a profit." It is going to be fun to watch this one grow and grow – and grow. Reference Collins, Jim. Good to Great Why Some Companies Make the Leap... and Others Don't. HarperBusiness. 2001.