10: Tactical Advantage - The Who
The author returns to the illegal street vendor narrative to underscore one of the points: that the vendors must know "who's who" on the street to be able to pick out the investigators and plain-clothes police who hide among the throngs of customers, and to know friend from foe among their fellow vendors.
In many instances, business is about connections between people, the quality and value of which can be difficult to measure. As an example, it's common for customer ordering periods to change when the company changes the salesman that services their account. Most often, it results in a decrease in orders (even if a mediocre salesman is replaced with one who is considered to be better).
There's a great deal of trust invested in relationships, and the author claims that customers can go through a "variant" of the grieving process when there's a change in salesmen. It's also a period in which many customers change to a different vendor.
(EN: I recall the same being said of superior-subordinate relationships: there is a marked drop in productivity when a boss is replaced, even under the best of circumstances - e.g., a promotion. Even if the "new boss" is a seasoned and skilled manager, the relationships suffer, and employee turnover and absenteeism increase.)
The author notes that this is largely due to the "haphazard" way most companies handle these transitions, and suggests that they can be an opportunity for a rival to move in. There is a window of opportunity when the relationship with the former salesman is fractured and the relationship with his replacement is not yet formed, during which time the business is a "cold, heartless exchange" in which competitors can more easily move in.
"Pitching" a customer during this time enables you to gather intelligence: ask the customer "normal" questions about what they like or dislike their current vendor, why they chose them to begin with, etc. These are fairly common inquiries, the answers to which may help you win over the account - but even if you do not, it will give you insight about your competition.
The Value of People
The primary differences between one company and the next is its human capital: the individuals and the connections among them. Focus is often misplaced on short-lived phenomena such as an idea, innovation, or technology - but more important than the technology is the person behind it, as the second is merely a consequence of the first.
Said another way, to steal an idea is considered a coup, but it's a small thing: the greater advantage is in stealing the employees who produce ideas for a company, as it takes not only their present ideas, but the stream of future innovations they will produce.
It's noted that recognizing the value of people is also important for internal purposes: many ideas, which is to say many capable individuals, are buried within large organizations. Innovation is lost in the clutter - which is why many companies that are innovative as start-ups become bogged down once they have grown, added head count, established many tiers of hierarchy and formal channels of communication.
The case-study mentioned is Google, which went from a nimble and innovative firm to a stodgy behemoth in a short period of time. In spite of an overt culture of innovation, the company became bogged down, and innovators were stifled. The prime example is Twitter, a social media leader, which was begun by Google employees who left because they couldn't get any traction in-house. Not only did Google let a good idea slip through its fingers, but it lost a cadre of creative people with a passionate work ethic. If a company does this for long enough, or on a large enough scale, it runs off virtually all of its best people, those with the capability of moving the company forward, either to start-up firms or to its competitors.
The author notes that Google has recognized this, and is attempting to analyze its workforce to determine which employees are likely to leave, in hopes of finding a way to retain them. However, competitors are similarly interested in leveraging the opportunity to lure innovative employees away from Google. (EN: much of this seems speculative - though entirely plausible.)
The author provides a few more examples, but sums it up fairly tightly: companies thrive and gain competitive advantage as a result of innovative ideas, which come from their employees. To remain successful, a company must employee a defensive strategy of recognizing innovators, retaining them, and putting their ideas to work, and recognizing that other companies will seek to do the same by "stealing" your best people.
Who's Who?
The author goes into an extended anecdote about physicists working on a defense system for modern unconventional warfare tactics - specifically, identifying suicide bombers in hostile foreign locations early enough to prevent them from doing much harm. Additional detail is provided, but it seems merely to underscore the point that the individuals who pose a threat are often hidden in a civilian population - and while it's important to be able to react to a threat, it's far more valuable in the long run to be able to recognize and identify the threat in the first place.
In terms of competition, this means recognizing which of your rivals is a present danger to your business, and avoiding spending resources reacting to false threats. And oper the previous section, it is likewise important to determine which of your employees is an asset before the competition does the same (as well as recognizing promising individuals that may be lured away from your rivals).