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Learn from the Wishful Thinking of Others to Take the Potential for Change Seriously

Feb 29, 2008
Imagine that you've just started a new company with a business plan that succeeds like gang busters. Pretty soon, it's hard for you to imagine that anything else but such success can follow. When that happens, you've hobbled your future with wishful thinking that will get you into trouble when competitors find your vulnerabilities.

Data Terminal Systems (DTS) was one of the highest flying technology companies and stocks of the 1970s. The company provided electronic equipment for checking out customers at retail stores like supermarkets.

Established and led by a CEO who knew a great deal about human motivation, the company performed marvelously quarter-to-quarter based on its finely tuned quarterly management by objectives (MBO) program: Make your quota, and a substantial bonus would be yours at the end of each quarter.

Like a rocket ship reaching outer space, the company was on a trajectory where its progress kept accelerating due to the bonus program. The company assumed that it had the best technology and the best products, and employees simply had to get out there and sell what the company made. That assumption was true, for a while. Otherwise, the company would not have been able to grow so rapidly.

Encouraged by the success of DTS, large numbers of competitors began to build custom equipment designed for this end market. Suddenly, the company's products were not so obviously superior, and competitors were pricing to gain a beachhead. DTS eventually collapsed in the face of this competitive onslaught, and the technology was eventually sold for a song to a larger company.

By wishfully thinking that it would continue to be successful simply based on its existing approach to technology products, and motivated employees, and by not preparing for the possibility of future tough competition, DTS became stalled and left itself wide open for failure. The company should have been running scared of future competition and have had plans in place to discourage competitors. After all, what's more predictable than the likelihood of attracting good competitors into a market that's highly profitable and growing rapidly?

DTS could have greatly reduced costs and prices through developing more advanced systems that others would have had difficulty duplicating. Or it could have gone into partnership with one of its likely, strong competitors to create a combined effectiveness that no one else could match.

But before it could do either one, it had to lose its self-satisfied view that no competitors would ever arrive. Why was the CEO so unrealistically optimistic? He had worked for a company which hadn't faced much competition for his entire career before founding DTS and simply assumed the same would pertain to DTS.

The markets, however, were quite different and his human-resource-based focus wasn't enough to steer DTS away from disaster with his wishful thinking.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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