Infrastructure
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3/31/2005
05:20 PM
Lou Bertin
Lou Bertin
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The Observer: Simplicity And Sound Execution Still Carry The Day

Despite the hoopla over synergistic marriages, it's plain, ol' pleasing the customer that keeps businesses going, Lou Bertin says.

A few weeks ago my interior-decorator bride and I made our way into North Carolina to visit one of her favorite furniture suppliers and there it was that I came upon a reminder of one of the immutable laws of business. (Note to travelers: If you're on Route 40 and your destination is exit 131 in Conover, N.C., don't get too excited as you pass exit 132 in Greensboro; you've still got about 90 minutes ahead of you, such are the vagaries of the exit-numbering systems on that road.)

The subject under discussion with my bride's supplier turned to ottomans: specifically, the tops of ottomans. And then it was that Gene, proud proprietor of the furniture maker, said simply: "If the customer likes that first view right out of the bag, you're not going to have too many problems with the piece." Simple, indisputable, and worth remembering the next time you come down with a bad case of "big-idea-itis." (Note to travelers: As you cruise along Route 40, you'll have several opportunities to stop at melodically named Biscuitville restaurants. Take every opportunity to visit all of them. Your taste buds and your cardiologist both will love you. Like Gene's advice, the food is simple, indisputably great, and worth remembering.)

The news lately has been filled with the aftermath of things that just didn't look good when they first came out of the bag or its corollary, which posits that some things just look too absurdly good coming out of the bag, as in: "How can they afford to sell Rolex watches for just $100?"

To wit: WorldCom's earnings and its charismatic leader. Enron's phenomenal ability to transform itself into a macro force in energy markets. HealthSouth leveraging economies of scale and a strong technology backbone to make health-care provisioning profitable. Let's go a little further back: A shirtsleeved TimeWarner chairman Gerry Levin throwing an arm around a buttoned-down, impeccably attired AOL chairman Steve Case. Digital Equipment Corp. being swallowed by Compaq and Compaq being swallowed by HP. Too bad that all that swallowing led to HP spitting out Carly Fiorina.

Enron, WorldCom, and HealthSouth are great examples of Times Square hustlers peddling Rolex inventories. Enough's been said and written about the sad casts of characters at each, but you've got to admit all of their outfits looked awfully, awfully attractive during those brief months before the cheap gold plating turned into greenish gunk on the watchband.

More telling of the 'too-good-to-be-true' variant are the examples of AOL-TimeWarner and Carly Fiorina at the helm of HP. Both seemed like absolutely perfect fits.

For AOL-TimeWarner, it was the synergy of arguably as content-rich an organization as exists on earth combining with the reach of the darling "new media" provider of its day. How could this combination possibly go wrong?

Carly Fiorina: A visionary with her feet on the ground. An ideal, charismatic choice to lead a company whose product sets were proven and well regarded, and whose corporate image lacked only that certain touch of sizzle that Fiorina was so well equipped to provide.

"Right out of the box for only $200 ... $150 for you, sport!"

Happily, there are more examples of the wise Gene's original thesis than there are of its evil twin, but while those examples of things that look terrific -- and really are terrific right out of the bag -- are smaller in scale than the debacles detailed above, they're no less significant.

Think of the sourcing agreements that really do work, now and for the long haul. Think of the investments in wireless technologies that really have delivered ROI on every level imaginable. The utterly tactical (translated: dull) investments in core technologies and competencies that keep the trains running as opposed to the splashy "synergistic" investments of the sort that defined companies such as Viacom, itself at the precipice of splitting itself up after so many acquisitive years.

Simplicity and sound execution are the by-words once again and that's a very, very good thing. Like that well-made, good-looking, customer-pleasing ottoman, when that first good long look yields pleasure, the odd flaw is either overlooked or viewed in an appropriate perspective.

Is this all to advocate timidity in place of vision? To push for the utterly tactical in place of a strategic approach? Hardly. It is, though, to aver that whatever is undertaken needs to be undertaken with an eye toward the eventual consumer's reaction. If that technology roll-out isn't handled well; if that upgrade is too enormous to be easily digested; if that reach for the stars distorts what an organization is all about, then the aftermath will be the equivalent of one of my bride's customers beholding an ottoman and seeing a huge stain right smack on the top. The dry cleaner may be able to get rid of the stain easily, but that customer's going to inspect every stitch and seam looking for whatever else might have been bollixed or, worse, fudged.

Gene got it exactly right, I think. And Biscuitville is damn good.



To discuss this column with other readers, please visit Lou Bertin's forum on the Listening Post.

To find out more about Lou, please visit his page on the Listening Post.

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