Home » Business

Understand The Always-Win, No-Lose Strategy

Apr 4, 2008
Let's use the weather, once again, as the basis for some examples to help bring the concept example of ideal best practice into better focus. For industries such as natural gas utilities, propane and oil dealers, and heating oil refiners (that produce the raw materials or provide the services used to heat homes, offices, and other buildings), good weather is "bad weather."

When nasty outside conditions make for uncomfortable internal conditions for everyone, these companies make the most money, but then only if the conditions last for a long time. And even under those circumstances, high profits are only possible if they have enough low-cost energy resources to supply most of the demand.

If weather conditions deteriorate enough, then they can interfere with the supply and deliveries needed to meet the increased demand. Weather that is too bad creates lost potential for the suppliers, before considering the terrible human consequences when heat fails during frigid weather.

How can these companies go about determining their ideal best practices for adapting to the weather?

Although we are talking about people in the business of supplying heat, the same thinking approach will be useful for your enterprise when considering your irresistible forces.

The heating companies can start by looking outside their industry to see if anyone else has to similarly consider weather conditions to find an optimal strategic approach, and check out what can be learned from those who get great results.

How about considering football fans who want to prepare for cold January games in outdoor stadiums, like the conditions often found at Lambeau Field in Green Bay, Wisconsin?

A January game means that their team is in the playoffs, so weather conditions aren't going to keep fans from attending this game. Despite conditions that might discourage an Eskimo from going hunting, the local football fans go to the game and have a wonderful time (especially when their team wins). While the weather may be a big factor for the visiting players, it's not much of an issue for the fans.

Why? The reason relates to the extreme effectiveness that the best-prepared groups of fans use to locate, anticipate, and adapt to the weather conditions at the game. Without going into all of the possible details, here are some examples.

Experienced fans know that weather forecasts can be wrong and that conditions can change after they've left home for the stadium. The ideal best practice cold-weather football fan comes prepared for all weather conditions, even conditions that are more extreme than have ever occurred before.

Such preparation means being ready for dry conditions, wet seats, sleet, snow, rain, or freezing rain in addition to wind, glare, fog and whiteout conditions. Electric socks, chemical foot and hand warmers, ski masks, many layers of clothes, and special types of weather-resistant clothing form a base line of protection.

Fans cover the seats with specially insulated materials. Wraparound sunglasses help protect the eyes against the glare, wind, and dirt exposures of such a game.

Those not inclined to sit out in the weather will have arranged to view from luxury boxes in fully heated five-star comfort. But even they need clothing and gear to travel safely and comfortably to and from their means of transportation should the stadium power fail. You get the idea.

One way the heating-related industries mitigate the effects of weather vagaries on their profits occurs states where the utility commissions have allowed pricing that ensures a regulated rate of return on investment, regardless of how much natural gas the customers use.

The utility's customers benefit in that they, too, don't have to worry about as much variability in the amount they spend for natural gas heating. So both sides find a benefit that allows them to locate, anticipate, and adapt to irresistible force weather changes in effective ways.

This structure is certainly a breakthrough solution arrived at through the pursuit of the ideal best practice. Fixed-price, multi-year contracts tied to futures prices for oil or gas can provide the same sort of insulation.
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 .
Rating:
Please Rate:
(Average: Not rated)
Views: 124
Print Email Report Share
Article Categories