December 8, 2005
Posted by Renee Hopkins Callahan
Tom Peters blogged about a terrific article from last Sunday's New York Times magazine (reg reqd) -- Coach Leach Goes Deep, Very Deep. Peters likens Leach's strategy to the thesis of Blue Ocean Strategy authors Chan Kim & Renée Mauborgne: "Value innovation is about making the competition irrelevant by creating uncontested market space. We argue that beating the competition within the confines of the existing industry is not the way to create profitable growth."
Mike Leach takes the mildly talented players that are available for him to recruit after the big-name schools such as Texas, Texas A&M and Oklahoma are through cherry-picking the best high-school football prospects in Texas, and he coaches them to brilliance by upending traditional football conventions such as placement of offensive linemen, use of clock time, and offensive balance (running vs passing). The conventional way of practicing football offense is to recruit talented guys and throw to them. One of Leach's offensive methods is to throw to as many receivers as possible during the game. This throws off the other team's defense and makes them work harder. Essentially Leach is putting more of the field into play, making the defense guard dwhat would ordinarily be open space on the field.
Texas Tech wins games by using other teams' strengths against them. An example: Do they have a defensive line full of huge scary guys who hit hard? Huge scary guys don't run fast, so run an offense whose main purpose is to make the huge scary guys on the defense run faster and harder. When they get tired, they won't be effective and then you'll score points.
This is an excellent story, well-written and well worth reading. You might also think about watching Texas Tech in the Cotton Bowl, to see if you can spot Leach's strategy. Tech will play Alabama, a team with a defense ranked extremely high. This may be a better matchup than any bowl except the Rose Bowl.
Disclaimer/side note: I went to Alabama and my boss went to Texas Tech. Hopefully we'll still be friends on Jan. 3!!
(Image source: Scout.com)
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November 21, 2005
Posted by Renee Hopkins Callahan
Georgia Institute of Technology released its 2005 Georgia Manufacturing Survey today. The study showed that "companies basing their competitive strategies on the development of innovative products or processes enjoy higher returns on sales, pay better wages and have less to fear from outsourcing than do manufacturers relying on other competitive strategies."
Georgia manufacturers that rely on innovation for their competitive edge reported returns on sales 50% higher than companies that compete by providing low cost products – a gap that grew substantially since the last survey in 2002. Innovative companies paid workers a third more than the average Georgia manufacturer and were 40% less likely to lose work to outsourcing than were companies competing on low cost.
The sales figures reported by the companies following an innovation strategy are even more astounding because these companies made up only 8% of the total of 648 manufacturers who responded to the survey. Here's the breakdown of competitive strategies reported by survey respondents (adds up to more than 100% because some companies reported more than one strategy):
# Providing high quality products and services (53%)
# Offering the lowest price (20%)
# Adapting products to customer needs (14%)
# Providing quick delivery of products or services (12%)
# Including value-added services with products (10%)
# Developing product innovations and new technology (8%)
The idea that 53% of the companies surveyed believe that providing high quality prices and services is a worthwhile competitive strategy amazes me. High quality is table stakes, not a strategy. These companies, and the 20% that are competing on a low-price strategy, are the companies that are going to lose to outsourced competitors. Indeed, the survey also showed that 18% of Georgia manufacturers lost work to international outsourcing between 2002 and 2004.
So what public policy recommendations should flow from this? Certainly it seems to be a better idea to stimulate innovation rather than to restrict outsourcing. But how can that be done? If the problem is money, perhaps government grants could be made available to companies for investment in innovative strategies. I don't think money is the entire problem, though. The problem is more likely that companies don't realize the value of innovation compared to other competitive strategies. How to remedy that is a real quandary.
Source: Study shows value of innovation to manufacturers as outsourcing's impact
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Renee Hopkins Callahan started IdeaFlow and serves as chief blog-wrangler. She is 
