The Flitting Of The Market Share Fairy

 

In the last couple of blogs I’ve laid out a few basic concepts, namely that the fuzzy-languaged pieces on this topic aren’t worth reading, how to identify them early on so you don’t have to waste your time, and some distinctions on what Strategic Management is not, as well as what it is. The short answer: Strategic Management is centered on those things the organization must do to capture more market share than the competition. Strategic Initiative Management (SIM), then, is the selection of those projects or initiatives that are aimed at capturing more market share, and managing them. It really is that simple, at this level; however, as with most things managerial, the actual execution gets rather complex.

First, Know What She Hates

Whether you are discovering or introducing a new market, or attempting to advance within a given one, the key word here is initiative. The fairy Market Share does not flit into your board room unbidden, and she absolutely loathes your Chief Financial Officer. Why? As I pointed out in my last blog, the overarching theme of Asset Managers everywhere, “maximize shareholder wealth,” is anathema to her. The accountants’ favorite formula, calculating the Return on Investment, or ROI, is already soaked in speculation (though the accountants will never admit as such). But to try to assess the return on, say, an advertising campaign is so subjective as to be practically impossible. All things being equal, however, some sort of marketing campaign is a real difference-maker – hence the money that pours into Madison Avenue, and the capital that brings favorite shows and football games into our living rooms.

Many project-based organizations do not advertise, or engage in anything but the most token marketing campaigns. Why? Because their customers are not the populace at large; they are, rather, those people who make decisions in organizations that build or procure things on a large scale. Oh, they’ll air the occasional television commercial to keep their brand out there – Boeing® has an ad that comes to mind – but even here it’s not about claims to the superiority of their products, but to keep their name familiar to most. So, how do companies that do not advertise in mass market mediums go about acquiring more market share?

Then Find Out What She Loves

If you said via superior Project Management, go to the head of the class. Yes, I know most contracts traditionally go to the lowest bidder (the governments of the world are also afflicted by Asset Managers). But when it comes to capturing more market share, the absolute worst thing the CEO can do is to attempt to “maximize shareholder wealth.” The customers of this world don’t care to make your shareholders wealthy. They want to receive their goods and services at the best price for the quality they expect, and the health of the profit and loss statement of the organizations they do business with is absolutely not a concern. So, which type of management was it, again, that’s centered on delivering goods and services within the customers’ expectations of scope, cost, and schedule?

But here’s an added twist: when the best applications of Project Management techniques become laden down with irrelevant factors, the price of PM goes up, making it less efficient and less effective. An example: I am unaware of any major project that can point to its use of a risk management system or analysis technique as a material cause of its eventual success. Now, I’m fully aware that, in almost every failed project, it’s fairly easy to place blame. It is, however, more difficult to accurately identify the causal factors that led to such failures. How easy it is, though, to simply state that the cause of a given project’s failure is “unforeseen circumstances?” Indeed, that could be the cause for all failures of human endeavor. So, what’s the fix for “unforeseen circumstances?” Well, to foresee them, of course! Cue the statisticians! They can quantify the future with decision tree or Monte Carlo simulations rolling out the probability of bad things happening, right?

Stop laughing. Risk management is a multi-billion dollar industry world-wide, and yet its shaky foundation is based on this very narrative. You may as well be trying to attract the Market Share fairy by using a large, steaming plate of haggis as bait. And by no means are the RM-types alone here: several different pseudo-management science practitioners have inserted their own version of alchemy into the PM mix, threatening its overall acceptance and validity. These don’t improve your project management capability – they just make your organization more hidebound (and irksome).

And Before You Know It, They’re Like Hummingbirds Fighting Over A Feeder

 Look, if your organization can execute its projects well and efficiently, while taking advantage of appropriate marketing opportunities, the team will be in an optimal position to attract market share. It’s impossible to say that these increases will come, due to the myriad unforeseen circumstances (the so-called unknown unkowns) that are present in all free-market environs.

But there can be no doubt that giving short shrift to “shareholder wealth,” and focusing on project sponsor satisfaction is a superior approach.