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Why Do Large Enterprises Incur So Much Unneeded Waste?
When the Soviet Union collapsed in the early 1990s and Boris Yeltsin’s government began to promote democracy and cooperation with its former Cold War enemies, especially the United States: we discovered many surprising and instructive things. It soon became clear that our decades-long fear and rivalry with the Communist titan was based on faulty assumptions. Russia was actually a third world country with a first world army. Aggressive? Yes. Dangerous? Yes. Warrior? Yes. But, the competition was really a one-sided competition between the Russian centrally planned system of coercion, the poor, the suffocating, the stifling, and the American model that is constantly evolving, dynamic, rich, energetic, that fully utilizes the benefits of a free and capitalist system. brings
This disparity in real resources and power, now so obvious, raises an interesting question: How did the Soviet Union deceive the Western democracies into believing that they had the capacity to control the world? Studying the history of the cold war is an interesting task. Opening up old Soviet archives reveals so much that contradicts the widely held beliefs of the time. The communists, having been eliminated, were creating a type of hyper-public relations (propaganda) to instill fear in their own populations and at the same time instill fear and harmony in the satellite states that they were protecting and occupying under military force. perfected Russia’s Western enemies were constantly forced to respond with threats, accusations and coercion. Yes, the Russians were classic school bullies!
The Potemkin-esque steps and disguises the Russians put on to make themselves appear bigger, tougher, and more capable than they really are, was a very clever strategy. The ability to appear older than you are is a time-tested strategy. It’s a strategy I’ve used for myself and for many clients in product positioning, inventions and small businesses to leverage maximum power in campaigns to overwhelm and confuse much larger competitors.
Why do large corporations, countries, and corporations allow themselves to be outsmarted and outmaneuvered by smaller or weaker adversaries? How did the underdog Russians deceive the mighty United States and its allies for decades? How can entrepreneurs and small businesses manipulate markets and large corporations to react to rumors or perceived, but unverified, truth?
I believe that the answer to these questions lies in the elements that occur after the growth of successful companies. Success and maturity usually invents. Energy and passion are not that valuable. Entrepreneurship can create fear in large organizations. Profits, money and donations slow down the pace of innovation. Waste is often tolerated after success is achieved. Why? Because anxiety and depression are often reduced because companies become fat and happy.
How did Coca-Cola initially miss the bottled water business opportunity? How did the US miss the obvious signs of recent Soviet bombings? Why did WalMart, a startup 30 years ago, replace Montgomery Ward, WT Grant, Woolworth, Kresge and many other established retailers? Why was FEMA so ineffective during Hurricane Katrina when FedEx, Home Depot and WalMart were so much more successful in providing timely service and assistance? In every business category we see young and energetic market leaders who are past maturity, but are scaring old competitors.
The Soviet Union was very competitive with the United States in the space race. The Russians, however, maintain an active space program using minimal equipment, the most basic technology and basic logistics. America’s space program was unlike any in the world with amazing levels of funding, sophisticated facilities and a military/industrial/scientific support complex. However, despite the huge disadvantages the Soviets faced, they were more than competitive. They had to be. They had no margin for error and waste.
A perfect metaphor for the difference between the fat, happy, and passive, and the lean, creative, and profitable is the development of the space pen. The simple act of writing in the zero gravity atmosphere of outer space was actually very difficult. The National Aeronautics and Space Administration (NASA) tried to perfect such a writing tool. Contracts for the development and production of such a device have been released several times. However, none of the prototypes presented could withstand the effects of gravity, extreme competition and weight all encountered inside the enclosed environment of the space capsule. Millions of dollars were spent to find a special private writing space.
When the Soviet Union collapsed, and the two countries began space cooperation, an interesting discovery was made. American scientists asked their Soviet counterparts what they were writing in space. Soviet response: “#2 lead pen”. The Soviets lost millions of rubles. They reverted to a simple emotional response to a basic need. Americans were able to spend millions to find a brilliant technical solution to this very simple problem because they simply could. This money, though wasted, was very little in the big financial machines of NASA and the federal government.
This small example is unusual and not an error. Alienation is a problem whenever large, leading companies face smaller, hungrier, and smarter rivals. This is the natural advantage of business. The spaceship model is repeated every day as entrepreneurs rush to fill the voids vacated or overlooked by large, successful companies.
My consulting company, Duquesa Marketing, Inc. works daily with businesses to optimize the strategies needed to overcome the effects of size and growth. The successful entrepreneur sees lead pen #2 as the obvious answer to the location pen problem. Finding, and finding simple solutions to real or perceived problems is why there will always be a class of successful inventors.
Contact Geoff Ficke, firstname.lastname@example.org, ph. 407 260 1127, to discuss this article or any business matter of interest.
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