Industry View: Preparing for Another War

Mike Lawshe, President and CEO, Paragon Solutions

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If Paul Revere were alive today, he would be riding up and down Main Street on a Harley yelling “Walmart is coming; Walmart is coming,” as we experience yet another invasion into our space from another industry.

Yes, it’s true: Walmart is entering the convenience-retailing arena again [CSP—May ’14, p. 16]. History repeats itself as grocery companies, drug stores, dollar stores, home-improvement stores, QSRs and barbecue restaurants continue to pursue the greener grass of convenience retailing and gasoline marketing. Our industry continues to respond to each invasion like a grief-stricken widow.

We all seem to follow the Kubler-Ross five stages of grief:

  1. Denial: “They are not going to do it.” “They are not going to do it in my market.” “They are not going to affect me ... much.”
  2. Anger: “Why me?” “It’s not fair!” “How dare they?”
  3. Bargaining: “Maybe I can work with them.” “If I let them take the metro area, maybe they will let me have the rural markets.”
  4. Depression: “I can’t believe this is happening to me.” “Woe is me.” “I only needed a few more good years, and now look what happened.”
  5. Acceptance: “I can do this.” “They aren’t coming to my town without a fight.” “I have been doing this longer then they have, so I can handle this.”

Hey, this is not a wake! There is not even a body. Yet.

What’s Our Weakness?

For those of us who have been around for a while, this is a rerun. Heck, this isn’t even Walmart’s first invasion. Why would the company do this? I think it is because it sees weakness, and from weakness comes opportunity. One of my favorite business books is “The Starbucks Experience” by Joseph A. Michelli. In it, he describes the perception of the coffee experience pre-1971, before Starbucks:

“… A visit to the convenience store, where we poured our own black, murky brew into a white foam cup. To kill the taste, we doused the mixture with gobs of powdered cream and sugar, and stirred it with a thin red plastic stick (which was supposed to double as a straw). We would hand our change to an apathetic cashier who performed the job just well enough to earn the minimum wage.”

This was obviously perceived as weakness, and Howard Schultz saw opportunity. The results, as they say, are history.

So what weakness does Walmart perceive? What opportunity are they pursuing? Are we too slow to change? Are we standing still and letting competition catch up and pass us? The answers to these questions and others are different for each of us, but I think the questions are the same and need to be asked. It often takes an outside, in-depth look into the company to understand what the true answers are and what we need to do about them.

The results will continue to be the same: Progressive, innovative companies that embrace change and strive for excellence in every part of their business will continue to survive, succeed and win.

Be an Old Lumberjack

All the war references I’ve made are intentional. You are in the middle of a fight for the life of your business. Don’t bring a knife to a gunfight. Prepare yourself with a plan that arms your company with intelligence (be students of the industry), ammunition (get your facilities prepared for battle with the best brand, best design, best products, best people and best operational expertise) and then go out and execute the plan.

I love the story of the lumberjack contest in which the young, strong lumberjacks were bested by the old, wise lumberjack. The old wise lumberjack would disappear every hour, and nobody knew where he went. When he returned, he was more productive than ever. In the end, he won the contest and revealed his secret: Each time he disappeared he would sharpen his ax, while the young, strong lumberjacks would just work harder.

Is your ax sharp? Is your brand up to the challenge? Is your design state of the art? Are your operations efficient? Are you ready for war? This war is winnable.

Walmart is coming? Who cares? We will be ready!

As Sun-Tzu said in “The Art of War”: “In the midst of chaos, there is also opportunity.”

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