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September 2023 – New-Customer SOS (Shiny Object Syndrome)
McKinsey & Company has revealed a top-secret competitive advantage for incumbent companies: their existing customers. Customer retention is almost always less expensive than customer acquisition. And the data supporting that common knowledge is striking: McKinsey found that the most effective growth companies produce 80% of their value “from their core business – principally, unlocking new…
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July 2022 – When the Going Gets Tough, Tough Companies Get Investing
What’s scarier than investing in your company in the midst of an economic downturn? Not investing in your company in the midst of an economic downturn. An HBR article describes how well thought-out investments (while biting your nails) during an economic pullback can actually position a company better for the future. But that takes courage…
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May 2022 – Spiraling Out of Control – Wages and Prices
Unless you’ve been hiding in your basement for the last couple of months (understandable if you were), you’ve probably heard about the dreaded Wage-Price Spiral (WPS) that many economists are predicting. A WPS can occur when prices rise, causing workers to demand higher wages. Companies then raise prices again to cover their now-higher wage expense…
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April 2022 – New CEOs – Do Only the Things Only You Can Do
Being a CEO is tough. But…what do they actually do, anyway? Aren’t all of the other people at the company doing all of the actual work? Maybe so, but we still need CEOs. According to a McKinsey study, the things that CEOs do create 45 percent – almost half – of a company’s performance results….
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March 2022 – Shokunin – Values and Purpose (Mission)
Reading Bob Igers’ book “The Ride of a Lifetime”, I came across an interesting concept, Shokunin – the “endless pursuit of perfection for a greater good”. According to Wikipedia the Shokunin “has an obligation to work his best for the general welfare of people”[2]. This concept resonated with me as it is a good reminder…
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January 2022 – Housing, Humans, and Algorithms…
Echoing the past, it seems Zillow has re-experienced some of the business dynamics that brought down the hedge fund LTCM, as was famously described in the book When Genius Failed. Zillow announced in November of last year that it would close its house flipping business, Zillow Offers, and write off over $500 million in losses….
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Saying Goodbye (to a Supply Chain Partner) Is Hard To Do
The global supply chain just played a real-world version of MIT’s “The Beer Game” – and lost. And due to soaring costs and super-slow deliveries, a breakup with China may now be in the offing. Maybe we should have just stayed home… As discussed in a previous PriSim post, no matter the industry, your company…
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Create an Unfair Advantage During a Recession
Could any rational company actually look forward to a recession? Here’s an article from the Associated Equipment Distributors that outlines how you can prepare for, rather than dread, an economic downturn. The article describes how Caterpillar actively planned for the 2008 recession and was able to produce a profit and advance its financial condition –…
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Best Buy is Still In Business. How is That Even Possible?
The last decade was brutal to the U.S. consumer electronics retailing industry. Several well-known companies failed, including Circuit City, Radio Shack, and Brookstone. And with the entrance of giant discounters CostCo and WalMart together with Amazon into the market space, success in the industry has become even more difficult to achieve. Yet against all odds,…
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The Importance of Execution
A business leader’s job is to successfully move the organization forward and improve business performance. This requires a continuous process of reflection, analysis, planning and execution. There is no better way to learn/practice these skills than “by doing”. During a business simulation exercise participants create their own plans and execute them in the simulation. The…