There’s an old story about a traveler who asked a farmer for directions to a nearby town.
The farmer replied, “Well, you go down the road for a mile, turn left at the fork. No, that won’t work.”
“You turn around and drive for half a mile till you hit a stop sign, then turn right,” the farmer continued. “No, that won’t work either.” After a long pause, the farmer looked at the confused traveler and said, “You know what, son, you can’t get there from here!”
That just happens to be the fate of many people, politicians, and products today. They happen to be in a position where “they can’t get there from here.”
Avis is not going to be No. 1. Wishing won’t make it so. And neither will massive amounts of advertising.
In many ways our country’s Vietnam experience was a typical example of American “can do” spirit. Anything is possible if only you try hard enough. But no matter how hard we tried, no matter how many soldiers and how much money we poured in, the problem could not be solved by an outside force.
We couldn’t get there from here.
In spite of hundreds of Vietnam examples to the contrary, we live in a “can do” environment. Yet many things are not possible, no matter how hard you try.
Take the 55-year-old executive vice president who is never going to get the top job. When the chief executive retires in a few years at age 65, the board appoints a 48-year-old successor.
The 55-year-old is out of phase for the president’s job. To have a chance for promotion, he or she must be at least a decade younger than the current holder.
In the battle for the mind, the same thing often happens to the product that’s out of phase.
Today a company can have a great product, a great sales force, a great advertising campaign and still fail miserably if it happens to be in a position in which “you can’t get there from here.” No matter how many millions it is prepared to spend.
And the best example is what happened to RCA in the computer business.
In 1969 we wrote an article for Industrial Marketing magazine using RCA as one of the prime examples. Entitled “Positioning Is a Game People Play in Today’s Me-Too Marketplace,” the article pulled no punches. It named names and made predictions, all based on the rules of a game called positioning. (It was the first time anyone had used the word “positioning” to describe the process of coping with the mental position that a larger, more established competitor occupies.)
One prediction, in particular, turned out to be strikingly accurate. As far as the computer industry was concerned, we wrote, “A company has no hope to make progress head-on against the position that IBM has established.”
The operative word, of course, was “head-on.” And while it’s possible to compete successfully with a market leader (the article suggested several approaches), the rules of positioning say it can’t be done “head-on.”
Back in 1969 this raised a few eyebrows. Who were we to say that a powerful, multibillion-dollar company like RCA couldn’t find happiness in the computer business if it so desired?
So as 1970 rolled around, it was full speed ahead at RCA. The incredible story was told in the pages of the business press.
“RCA fires a broadside at No. 1,” said the headline of an article in the September 19, 1970, issue of Business Week.
“RCA goes head-to-head with IBM,” said the headline of a news item in the October 1970 issue of Fortune.
“RCA computer push is head-on slash at IBM,” said the headline of a story in the October 26, 1970, issue of Advertising Age.
And just to make sure there was no mistaking the company’s intentions, Robert W. Sarnoff, chairman and president, made a prediction that by the end of 1970, RCA would be in a “firm No. 2 position” in the computer industry. Pointing out that his company had already invested “far more to develop a strong position in the computer industry than we have ever put into any previous business venture,” including color TV, Mr. Sarnoff said that the goal had been development of a solid profit position in the early seventies.
Less than a year later, the roof fell in. “The $250 million disaster that hit RCA,” said the headline of a story in the September 25, 1971, issue of Business Week.
That’s a lot of dough. Someone figured out that if you took that much money in one-hundred-dollar bills and put it on the sidewalk in Rockefeller Center, the stack would go right past Bob Sarnoff’s window on the 53rd floor of the RCA Building.
Those were bad times for computer manufacturers. In May 1970, after years of unprofitable computer operations, General Electric threw in the sponge by selling the mess to Honeywell.
With two major computer manufacturers folding one right after another, the urge to say “I told you so” was irresistible. So later in the year 1971, we came back with “Positioning Revisited: Why Didn’t GE and RCA Listen?” (The article appeared in the November 1971 issue of Industrial Marketing.)
How do you advertise and market against a company like IBM? The two positioning articles made some suggestions.
The computer business has often been referred to as “Snow White and the Seven Dwarfs.” Snow White has established a position unrivaled in the history of marketing.
IBM has 70 percent of the mainframe computer business vs. less than 10 percent for the largest of the dwarfs.
How do you go against a company with a position like IBM?
Well, first you have to recognize it. Then you don’t do the thing that too many people in the computer field try to do. Act like IBM.
A company has no hope to make progress head-on against the position that IBM has established. And history, so far, has proved this to be true.
The small companies in the field probably recognize this. But the big companies seem to think they can take their strong positions against IBM. Well, as one unhappy executive was heard to say, “There just isn’t enough money in the world.” You can’t get there from here.
“Fight fire with fire” is the old cliché. But as the late Howard Gossage used to say, “That’s silly. You fight fire with water.”
A better strategy for IBM’s competitors would be to take advantage of whatever positions they already own in the minds of their prospects and then relate them to a new position in computers. For example, how should RCA have positioned its computer line?
Our 1969 article made a suggestion: “RCA is a leader in communications. If they positioned a computer line that related to their business in communications, they could take advantage of their own position. Even though they would be ignoring a great deal of business, they would be establishing a strong beachhead.”
Take General Electric, a company that is a big user of computers. Time sharing was the big technological topic of the day. If GE had concentrated on time-sharing computers, they too might have succeeded in the computer field. (Actually, the only computer operation General Electric didn’t sell to Honeywell was their time-sharing network, which remains profitable to this day.)
Take NCR, a company with a strong position in cash registers.
NCR has made great progress in the computer business by concentrating its efforts on retail data entry systems. Computerized cash registers, if you will.
Where the situation is hopeless, however, the effort in finding a valid position is probably wasted. Much better to concentrate on other areas of a company’s business. As Charlie Brown said, “No problem is too big to run away from.”
In truth, outright failure is often preferable to mediocre success.
An also-ran can easily be tempted to think that the answer to the problem is trying harder. A company stuck with a losing position is not going to benefit much from hard work.
The problem is not what, but when, The extra effort, if it is going to be of much help, should be applied early to establish the precious posture of product leadership.
With it, everything is possible. Without it, the going is going to be rough indeed. (As the Eskimo remarked, the lead dog is the only one who enjoys a change of view.)
One example might help illustrate the principle. Two gentlemen had their eyes on the top job at General Electric. One was named Smith. The other was named Jones.
Smith was your typical “can do” corporate executive. So when he was given the computer operation to run, he accepted the assignment with relish.
Jones, on the other hand, was realistic. He knew that GE hadn’t gotten into the computer business early enough to dominate it. At this late stage of the game, it was going to cost the company too much to catch up to IBM. If it ever could.
After Smith failed to turn the computer business around, Jones got a chance to participate. He recommended that General Electric get out of the computer business, which it eventually did by selling the operation to Honeywell.
That’s one reason why Reginald H. Jones wound up as chief executive of the General Electric Company. And J. Stanford Smith wound up at International Paper.
In a nutshell, the hierarchy in the computer business is duplicated in almost every other industry. Invariably, every industry has a strong leader (IBM in computers, Xerox in copiers, and General Motors in automobiles) and a host of also-rans.
If one can understand the role of positioning in the computer industry, then one can transfer this knowledge to almost any other situation.
What works for computers will also work for cars and for colas.
Or vice versa.