The Third Rule

There are not many hard and fast rules in business. But, companies struggle when they don’t follow three basic rules and fail to realize that everything else changes. 

Play the right game

 

In business you have to be sure you are playing the right game.  Just ask the ex CEO of Nokia. In September of 2013 he announced that Nokia was being acquired by Microsoft, signaling the end of the once dominant mobile phone manufacturer. The CEO ended his announcement speech stating: “We didn’t do anything wrong, but somehow we lost.” 

 

 

 

Faced with the failure that was seemingly out of their hands the team was overcome with emotion.  But, of course, they did do something wrong.  Nokia, like so many companies before and after played by the wrong rules. They thought they understood the market. They thought they dominated the
market.  

 

And then the market changed.  

 

In business there are very few rules.  In fact, there are three. They aren’t complex, difficult to understand and, being rules, they don’t change.   Yet, in our experience, many businesses miss them. All too often they focus on the wrong things and face failure as a result.  

The first two come from Michael Raynor and Mumtaz Ahmed who published their rules in the Harvard Business Review: 

1. Better Before Cheaper

2. Revenue Before Cost 

We add a third rule: 

3. Systematize the business

We see this as critical to scaling a business as well as meeting the challenge of constant change.