| About the Case Study Guide for each Episode of the show. | |
| with Bill Antle Oak Industries Waltham, Massachusetts |
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| Key Ideas.
Big Idea #1: You can't cost-reduce your way out of a strategic problem. Oak Industries had been losing money before they hired Bill. He targeted the companies with a weak position in its marketplace. If a company did not enjoy a high percentage of the market, he sold it. Bill believes that to be above average, a company needs to dominate its market. The same is true for all successful small businesses. For example, Jerry Shapiro is small; however, he captured 99% of the bagel market in Tokyo. Jerry does not ship his bagels into New York City. Why? He would have to compete with hundreds of the best bagel shops in the world. Bill would say that Jerry could not lower his costs enough to build a profitable bagel business in New York City. However, because he "owns" the market in Tokyo, he is very profitable. You think back: How do you evaluate the position a product has in its market? Answer: Find out its sales as compared to its competitors. Big Idea #2: Build a team of winners. Bill discovered quickly that he had a group of managers who were in the habit of "losing." He reasoned that it would be impossible for these managers to generate the energy and to endure the changes required for them to win. knowing that you are coming from behind can be damaging to self-esteem. Only leaders with strong self-esteem are going to have the will power to persevere and perform the really difficult tasks. By offering ownership, Bill recruited new leadership. This fresh team was highly motivated to do what needed to be done to get Oak Industries in the black. What do you think? What is a stock option? Answer: The company is valued then broken into pieces and sold to individuals for a "price per share." A company will offer a stock option to employees for free -- or at a discount -- as a way of compensating them without releasing its cash. You think back: Why would offering stock options to
new managers motivate them to work hard? Answer: If they produce profits, their stock increases in value. Big Idea #3: Keep the top people focused on what the customer will need five-to-ten years from now. Know your demo. Rather than assign day-to-day decisions to his small corporate staff, Bill delegated these decisions to the local managers who ran each separate company for Oak Industries. Local managers enjoyed a sense of freedom and power while the corporate staff focused on long-range plans for doing business in five-to-ten years. What do you think? Can this technique be applied to a business with fewer than 10 employees? Answer: It is difficult, but it can be done. The owner must hire smart people and delegate responsibility to them. Darby McQuade was finally able to expand his business when he hired experienced people. Robert Redford who only started his catalog company when he was able to recruit Harry Rosenthal and David Arnold is confident he could not be where he is today without Sterling Woody, his CFO. Big Idea #4: Picture postcards have a very high read rate. Jeff Slutsky says that people read mail that grabs their attention. You think back: Why did the printer realize such a high response rate from her direct mail? Answer: She used a picture postcard from Las Vegas and wrote a clever message. What do you think? Does marketing depend only on money? Answer: No. Marketing does cost money; however, brains will
usually outperform bucks. We learned this from
Tim Hennessey,
Andy Wilson,
Lorraine Miller,
Joseph Johnson and
Bob Simpson. We invite your questions or comments. |