Two Questions That Were Worth Billions To A CEO

Peter Drucker, the father of modern management and the world's foremost management consultant once asked Jack Welch, CEO of GE, two questions that proofed to be worth billions of Dollars during Jack Welch's tenure as CEO. The first question was "If GE weren't already in a business, would you enter it today?" The he followed up with, "If the answer is no, what are you going to do about it?" Welch decided that if GE could not be number one or number two in a market, the business would have to be fixed, sold or closed.



I suggest that every business owner ask himself or herself the same questions. Now you might ask "What's wrong with being number 3 or number 11 in the market?" which is a great question. After all, if there would only ever be two competitors in any market, the business world would be a pretty empty place. If you are number 20 out the 500 leading manufacturers in your field, chances are that you are still doing very very well.



But let's face it, in the UK there are 2.15 million businesses in 2010, but 98 % out of them have less than 50 employees and just 0.4 % count for larger enterprises with over 250 staff, and 47% of all UK businesses are under 4 years old , so chances are that you, dear reader, are not leading one of those large corporations where being number 20 still means to run a world-class business, but that you are the owner of a start-up or small or medium sized enterprise, where being number 20 means struggling to justify and keep your place in the market.



If you are number 20 or so, it means that your clients have difficulties to perceive you as different or outstanding, and that's exactly why we always remember the number one or two, but not anyone further down the ranks. Who is the number one online bookstore? Amazon. Who is number 5? Who is the number one department store? Harrods. Number 2? John Lewis. Number 3? Get's difficult.



If you can't win, and by winning I mean be number 1,2 or three, there are only two reasons for it in the world: The first reason is that other competitors are outperforming you, and reason number two is that you are in a market where you should not be in the first place, because you can't win.



Now what's the point of persisting to play when you can't become top? No athlete competes to always be number 5, they compete to win.

Well, you might say, that's all fine and dandy, but I need to make a living and making a living as number 20 in the market place is still better than making no living by giving up.



But that's not the point. The point is that you should either fix it, and means to become better. In the UK today, you still can butcher the competition in any given industry by just offering a customer service that blows away clients. If you can't fix it, sell it or close it down and enter a market place where you can win, but don't burn your resources in a place you can't be first.



Practical tips on how you can improve your business practice and win can be downloaded free on http://remborpartners.com/index.php?module=news&type=article



The author, Eugene Rembor, MBA is a management consultant, keynote speaker and author of "Doing Business with Americans" and "The Essential Business Start-Up Entrepreneur's Manual" (http://remborpartners.com/index.php?module=page&pageId=5)