Core competence

A bunch of stuff has hit my desk recently. It all seems related somehow. See if you can find the thread that connects them.

ManagementSpeak: Boy, we dodged a bullet on that one.

Translation: What’s bad isn’t that we shot ourselves in the foot. It’s how fast we reloaded and fired again.

— IS Survivalist Mike Laugh explains the source of enemy fire.

A bunch of stuff has hit my desk recently. It all seems related somehow. See if you can find the thread that connects them.

While cleaning out old magazines I found the October issue of Darwin magazine, which published its “Fittest 50” list. Yup, there was Enron. Still, Darwin is a fine publication. Lots of others fell for Enron’s buzz, too.

Speaking of magazine articles, one by Burt Cohen in Twin Cities Business Monthly caught my eye. It wasn’t the first article I’ve seen excoriating the common business practice of placating Wall St by focusing solely on this quarter’s results no matter how much you mortgage your future, but Cohen did say it well.

Which leads us back to Enron. How? Among the many guilty parties identified in the ongoing blamefest is Wall St. Turns out that many of those analysts who insist on great this-quarter results looked at Enron in more friendly terms. Why? Their employers wanted Enron’s investment banking business, that’s why. With luck, Wall St’s analysts will lose some clout and we can all stop being deliberately stupid just to please these geniuses.

USA Today printed something useful, too: a piece by Stephanie Armour about companies that refuse to lay off employees just to make the numbers. In it she cites a study by Watson Wyatt showing, among other happy conclusions, that excellence in recruiting and retention results in increased shareholder value — nearly 8% more, in fact.

Back to Twin Cities Business Monthly, which profiled Joel and John Schwieters, who own eight companies in the US home construction industry. They frame and finish houses twice as fast as most construction companies, their projects lack the debris that usually litters construction sites, they’re known for exceptional quality and they’re growing by more than 20% per year.

How do they achieve these results? Unlike nearly every other construction company, they don’t subcontract their workforce. They employ their builders, paying them a regular salary, excellent benefits and a shared bonus pool. Even more interesting is that they’re expanding into their supply chain. Whereas the popular core/context theory applauds companies that prefer outsourcing any activity that’s “non-core” (that is, not a marketplace differentiator), the Schwieterses understand that controlling the supply and delivery of doors, trim and pre-built staircases, for example, will improve their margins.

I suppose I should mention they’re innovative in their use of information technology, too.

Find the thread? Send Lewis an email. Lewis is president of IT Catalysts, an independent consultancy specialising in IT effectiveness and strategic alignment.

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