Remember the Razr phone? A few years ago, it was the hottest cell phone in the world. Thinner, cooler, better hellip; millions of Americans just had to have one.
There were hundreds of cell phones to choose from, but many of us bought a Razr. It was the in product of the moment. As a result, Motorola ( ) sold tens of millions of phones and hit a home run.
No, make that a grand slam. Whenever we buy something, anything, we search out the best in the world. Whatever best means to us, we're rational consumers and if we think the combination of quality, value, availability and experience is the best, we grab it.
And for a lot of us, the Razr was the best, so we took it. Fast forward to today. Motorola makes a huge variety of phones, but no one is waiting in line to buy any particular model.
The company is under price pressure because if all the phones they make are good enough, hey, we'll just buy a cheaper one. When everything seems similar, smart and busy people seek out the cheapest alternative. That's why Carl Icahn, the corporate raider turned shareholder activist, has been agitating for change at the company.
, chief executive of Motorola, must be getting used to this. The same thing happened at his last employer, Sun Microsystems ( ). Running a hardware technology company is a big deal.
You need thousands of people (expensive ones). You need to keep a lot of inventory (expensive inventory) and the factories you must build to exist in the industry are more expensive still. Showing up is expensive and difficult.
Every single day, just opening the doors costs a fortune. The same thing is true wherever you work. Maybe it's not on the same scale as Motorola or Sun, but the effort involved in building and running an organization is huge.
It's easy to settle and convince yourself that what you're offering is the best you could do at the time. The shame of it is this: You can do 95% of what you need to do and still fail to be chosen by the market. You can do all the essential things and still not be the best in the world.
In fact, most of the time, companies get stuck being average. We do all the work we're required to do, do all the investment, take all the time hellip;and we're stuck right next to our competition, battling it out for market share. There are 10,000 musicians out there working just as hard as Gwen Stefani or Cat Power.
But you've never even heard of them. Why? What separates the hits from the merely hardworking?
Hint: It's not the amount of work. It's not the infrastructure or how much attention is paid to a particular feature. It turns out that being more average than the next guy is a recipe for failure.
Sure, plenty of companies plod along being just average, but they're failures because they never even come close to realizing their potential. How does a company break out of that rut? The most effective strategy is the Apple ( )/ /Google ( )/ /New Yorker magazine approach.
Once you realize that everyone else is already committed to the first 95%, embrace the fact that all the benefits mdash;and all the profits mdash;come from the last 5%. That's the 5% devoted to style or to risk or to quality. That last push, the part that gets you through the hard part (what everyone else in your industry is doing just to get by), is what I call the Dip.
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