15 of 17 people found the following review helpful
How Companies Win by Rick Kash and David Calhoun is recommended reading for executives facing the need to grow revenues in a sluggish economy. Kash and Calhoun provide a comprehensive discussion of what is going on -- namely the shift from a world driven by your supply chain to one driven by a new demand chain. The demand driven world described by Kash and Calhoun explains why and how companies need to change their approach to win in the future.
Just about every company's strategy is based on the idea that demand is greater than supply and all that they have to do is be better than the competition and the money will flow. Kash and Calhoun make a strong argument that the economy has shifted with more supply than demand. This simple shift changes the whole basis for enterprise strategy, marketing strategies, products and services. The impact of this change and how leaders are using this reality to their benefit is the subject of the book.
While the book is targeted primarily at Marketing Professionals, I recommend this book for executives looking to understand how to move forward and capture the markets that matter. Line executives will gain an understanding of the importance of addressing different market segments. Technology professionals will appreciate the role that information plays in defining the demand driven enterprise. Others will find the author's arguments providing an interesting view on what is going on in a world where traditional notions of strategy and competitive advantage are under threat.
The book is clear and comprehensive. The authors describe the process for creating a demand driven strategy and plans work. The results they achieve and sample deliverables. This discussion provides a clear view on the concepts they present and how they might apply to your company.
The book contains detailed discussions and case studies of leading companies like Best Buy, Hershey's, P&G and others. The cases cover both the decisions facing executives as well as the results they achieved. While case studies are common in business books the time, detailed and coverage are a strength of the book.
The book tackles complex issues that other actors assume away. I have read very few books that talk about issues like pricing, operational precision, etc. These discussions are helpful in taking a broader look at issues related to creating and demand driven organization.
The book considers the entire enterprise and its response to a demand driven world. The need to create a demand chain, new forms of marketing, the need for precision and operational excellence are all great points that make this a book that goes well beyond describing new ways of marketing.
The book is focused on providing a business based explanation of the challenge facing companies and its impact on top and bottom line revenue. While the book does advocate a set of techniques for becoming a demand driven organization, it never loses sight of the need to drive business results.
The authors come from a Marketing background and the techniques in the book are marketing centric. However, the issues raised living in a demand driven world go beyond revising your marketing strategy. The authors know this and look to address the points in latter chapters, but there is room for additional material and insight into the operational, execution and other issues involved in becoming a demand driven organization.
The authors are consultants who have applied their tools with leading companies across multiple industries. At times, the book drifts into branding which detracts from the message. It does not happen often, but when it does its noticeable.
The consumer products and food industry are among the first to experience the reality of excess supply and therefore they represent many of the case examples. While the authors acknowledge business to business commerce, it is not the focus of the book. that does not mean that the concepts do not apply in business to business. It just means that the reader will have to work a little bit to apply these concepts to this situation.
Overall, this book uses a different view of the relationship between demand and supply to create new forms of strategy, new ways of looking at customers and markets, and new ways to execute in a tough business environment.
In a world that has changed we all need new ideas and new tools. Kash and Calhoun provide executives with the ideas they need to answer the question, where we go from here
12 of 14 people found the following review helpful
on November 5, 2010
This is a different kind of business book - in a great way.
How Companies Win simultaneously manages to introduce a macro-level pivot in how businesses should think while serving as a tactical how-to guide for implementing that thinking. So often "strategy" books fail at one of those: either giving us a new lens with which to see the world (but no tools to act on it) or new tools to act in the world (but no understanding of why those tools are paramount). How Companies Win gives us both.
The pro and con of this book is that it covers so many aspects of winning. Everything is grounded in the same fundamental new truth - that winning today requires a disciplined understanding and segmentation of demand - but Kash and Calhoun show us how that principle should impact decisions across a business. That is to say, this is not a book about how marketing wins or how product wins or how sales wins, it's a book about how companies win. For some, that enterprise breadth may make this a challenging read, but for those who have the ability and the will to impact their business' winnability holistically, this book will resonate.
And that doesn't have to be a big business, really. One of the most compelling things about How Companies Win is that the authors' frameworks should apply as easily to my neighborhood's dry-cleaning shop as a major retailer. Kash and Calhoun default to big, household-name case studies, but a small business owner has just as much reason to pick up this book and start identifying their most profitable sources of demand. In many ways, it might even be easier to use this book's tools at the entrepreneurial level. (See: Kash's anecdote of selling shoes in college). Similarly, I agree with a prior review that a B2B could get more out of the book than this book than the case studies and endorsements would let on.
These days, most business books could be condensed into an HBR article, but I think How Companies Win has more steak to the sizzle. The tools are pretty simple and straightforward, but to apply them properly requires the thoughtful examination of demand-driven business that Kash and Calhoun present here.
There's the old adage that the man who knows HOW to do something will always have a job and the man who knows WHY to do something will be that person's boss. This book is for business thinkers who want both: the tactics to navigate a demand-driven economy and an understanding of why that's consequential.
1 of 1 people found the following review helpful
on December 13, 2010
How Companies Win is an in-depth look at a present-day issue that currently has many companies in a quandary. Authors Kash and Calhoun invested a lot of time and effort into investigating what may be causing many companies to miss the boat within their own industries. They found that too much effort was spent on the supply chain and not enough time was spent looking for the demand chain. Using many relevant, present-day case studies, they show us how large companies have completely missed not only their market, but also the true demand and almost went out of business because of it. McDonald's was sliding off the page until they realized that they needed to meet the demand of a broader audience by slowing the rate of expansion, adding increased value, increasing cleanliness, and improving customer service. After making these changes, the average order went from $5 to $12, a huge save for the company in a short period of time. They decided to scale back their plan of opening 1000 new restaurants per year to only 500 instead. My favorite quote from this book is "In McDonald's headlong rush to become bigger, to dominate the global market, it had lost track of its parallel need to also become better at understanding consumers' latent and emerging demand." Another great example in the book was the Ball Park Frank study. After finding that they were focusing on the wrong market, the male barbequer, they switched to the health conscious mother of teens and saved the company from the dwindling sales problem they were experiencing. For both of these companies, the supply chain stayed the same; the switch to find the demand chain is what made the difference. One of the main themes of the book seems to be that companies need to be willing to accept that they need to be willing to adjust to current needs in order to succeed. In the conclusion of the book, the authors write, "Evolving from a supply-driven company to a demand-driven company is as much a matter of attitude as it is a process."
1 of 1 people found the following review helpful
Many companies have gone out of business because their leaders were convinced that "if we build it, they will come." It made no difference what the "it" was, how well it was built, or who "they" were. In the Introduction to this book, Rick Kash and David Calhoun state their core thesis with commendable clarity: "Demand id what customers possess in terms of the needs and desires - emotional, psychological, and physical - they want satisfied, and have the purchasing power to satisfy." Here what they explain and illustrate throughout their lively and eloquent narrative: The forces behind the transition (i.e. paradigm shift) from a supply-driven to a demand-driven economy; how to develop and then execute the business strategies required by that shift, and the tools needed throughout the execution process.
The demand to which Kash and Calhoun refer "includes physical, psychological, and emotive components. Backed by economic purchasing power. Demand is both near term and longer term, not just the instantaneous fulfillment of a need...Demand is multidimensional in other ways and can be classified as current, latent, and emerging." They list the ten primary characteristics of a demand-driven corporation (on Page 9) and then shift their attention to a series of rigorous analyses of exemplary companies to explain
o How McDonalds, "a troubled and aging company just five years ago," found new life, continuous growth --- and new profits
o Why Allstate began to offer more features and customer choices that that were contrary to conventional risk practices
o How and why Best Buy thrived while its #1 competitor (Circuit City) went out of business
o How and why Bud Light Lime became one of the fastest-growing new beer introductions during the past 25 years
Yes, I realize that these and other exemplar companies discussed by Kash and Calhoun are among the largest global corporations. However, the lessons to be learned from them can be of substantial benefit to all companies, regardless of their size or nature. They may be even more valuable to small companies that have severely limited resources and much thinner margins for error, if any margins at all. Obviously, the major challenge is this: How to become a demand-driven business?
Here is a representative selection of what Kash and Calhoun examine and then explain, clearly and thoroughly:
1. How to master the skills needed to ask the right questions, obtain the right answers, and then take appropriate action.
2. What "demand gaps" are and how to reduce or (preferably eliminate them
3. In a demand-driven organization, what innovation is...and isn't.
4. What the opportunity identification process involves
5. What demand-driven pricing principles are and how to apply them
6. What the "Thesis of Winning" is, with Bill Walsh discussed as an exemplar
7. How to formulate and then disseminate an "Enterprise Message"
8. Why and how demand-driven strategies and tactics must also be customer-driven
9. "Fast Cycle Response Time"
10. Eight "tough questions" business leaders must ask/answer about themselves, their companies, their category, and their competitive marketplace
With regard to #10, Kash and Calhoun make excellent use of questions throughout their narrative, strategically inserting "checklists," admonitions (i.e. do's and don'ts), and mini-summaries. The various questions challenge their reader to think about what must be done and how to get it done.
In this context, I am reminded of other questions posed by Peter Drucker and Fred Reichheld that also focus on what is most important as opposed to what is merely urgent. All demand-driven leaders would be well-advised to consider five from Drucker: What is your mission? Who is your customer? What does your customer value? What results are you trying to accomplish? What is your plan? My person favorite among Drucker's quotations is this one: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all." Asking the right questions will help to avoid making that mistake.
Here are two more from Reichheld, both very important: "Based on your experience with us, on a scale of one to ten, would you recommend us to others? Then, whatever score you receive, if it is less than a ten, you immediately follow up by asking: What would we have to do to earn a ten from you?"
It is easy to ask questions but sometimes very difficult to know what the right questions to ask are. Rick Kash and David Calhoun help the business leaders who read this book to do that and, better yet, they help them to obtain the right answers so they and their associates can design a design-driven model and then formulate a cohesive, comprehensive, and cost-effective plan to make that compelling vision a prosperous reality.
1 of 1 people found the following review helpful
The concept of supply and demand has a venerable history. Scottish social philosopher Adam Smith used the phrase in "An Inquiry into the Nature and Causes of the Wealth of Nations." Other great economists and thinkers, from John Maynard Keynes to John Kenneth Galbraith, covered it extensively. Today's wisdom: Forget about it. Consultant Rick Kash and executive David Calhoun turn this bedrock concept inside out, transforming it into the "Law of Demand and Supply." They explain why businesses that focus on supply and attempt to force demand to align with it will lose big. The sooner sellers accept the reality of the demand economy and adjust, the better chance they will have to survive rocky economic times and flourish in the years to come. getAbstract finds that this book conveys an important message to business leaders. While these authors may not be Smith, Keynes or Galbraith, they certainly have a keen grasp of big concepts.
on September 7, 2013
While the second half of the book kinda blows, the first half if frick'en amazing.
Here is the key concept.
In a world where it is really easy to learn how to create anything, companies (you) have a huge amount of competition. Given that, supply is essentially infinite. When supply outstrips demand, price goes to crap.
But traditional marketing is about creating demand. Well, when supply outstrips demand, that is a loosing game.
Instead of trying to create demand, what if marketing looked into your customer base (or target market) to identify a sub-set of demand. A smaller set of customers who loved your product just the way it was - including the higher price? In that market, you would be the king. That is, if you can find "Demand-Pools" (markets where your product was the superior in the minds of that group of buyers) you could command higher price and/or more sales. Why? Because your product is already configured the way that group wants to buy.
The book looks at All-BEEF Hotdogs. It turns out that two groups love all-beef hotdogs. Mothers with teenage sons (also known as eating machines) and Hotdog lovers.
Mothers see beef as better than pork (healthier). So they will pay a premium.
People who love hotdogs BOIL them never GRILL them because grilling takes flavor away where as boiling retains the hotdog's flavor. Again, people who love hotdogs will pay a premium for better tasting hotdogs. And the all-beef franks fit that bill.
In both cases the marketer's job is NOT to stimulate demand, but to FIND these markets where people are willing to pay more for all-beef franks.
The hotdog manufacture can still complete in the Summer-Grilling market. That is, they can still lower price to complete on store shelves in the summer. But they can also re-package their product for fast microwaving (teenage boy market) and blog on Mommy blogs to get mothers to learn about the availability of the microwave version. In that market, they know that mothers are looking to solve this problem - "Help me feed my hungry son(s) something that I perceive to be healthy - and let it be fast to prepare."
The cost to wrap each beef-wiener for microwaving is minimal. And the Mommy-with-teenage-sons market is willing to pay a premium for an all-beef frank. AND ... pork hotdogs don't have the key attribute of perceived health. So the all-beef manufacture only needs to inform that market and take advantage of the existing (although latent) demand THEN be on the store shelve.
Stimulating demand is unnecessary. The Demand-Pool is the moms I described above. There is no need to stimulate demand. And the beef dogs, enjoy a protection from the pork dog market. In other words, in a Demand-Pool, you have the advantage BECAUSE your existing product has (or could have) a key attribute. A Demand-Pool is NOT a niche market. Think how huge a market moms with sons are? With an average of two kids per family there is a 66% chance that a family has one son. (not 50%. boys to girl break down 0:2, 1:1, 2:0 = 2/3 chance or 66%).
So a Demand-Pool can be a huge market. And a well protected market.
My only two complaints are that the book did not have MORE examples of Demand-Pools. And the second half is about implementing this strategy in a mega-corporation (think P&G). It seems like a plug to hire the author for consulting work. Still worth buying!
6 of 9 people found the following review helpful
on November 1, 2010
In their new book, HOW COMPANIES WIN, Dave Calhoun (Chairman & CEO of The Nielsen Company, and former Vice Chairman of The General Electric Company) and Rick Kash (CEO of The Cambridge Group, a leading growth strategy consulting firm that is a division of The Nielsen Company) provide new insights into how companies can win in today's challenging economy. Their key to success is counseling companies to pay as much -- or even more -- attention to raising the performance of their Demand Chain as they do improving their Supply Chain.
After decades of supply chain optimization, we now have an economy filled with over-supply and highly efficient supply chains. In this environment, what most companies lack is a clear understanding for how to uncover and unlock new sources of demand for their business, and how to comprehensively and scientifically influence their entire end-to-end demand chain to drive growth.
The authors illustrate their principles using recent, real-world cases based on client work for top management teams, including leading companies such as Allstate, Anheuser-Busch, Best Buy, Hershey's, and McDonald's.
In all cases, these companies took a huge step back to more fully understand consumer demand that was under the surface, and used those insights to create a new set of consumer experiences that were translated into innovative products, services, marketing/media, sales and pricing programs. In many cases, the work involved required the attention of the entire leadership team -- CEO, CMO, CIO, CFO, Chief HR Officer -- to reset priorities and realign the organization to drive growth. It is an approach that can be enduring for any business, and one which is flexible and adaptive to changes in economic and competitive conditions.
HOW COMPANIES WIN is must reading for any senior executive who is looking to turn a slow or declining growth business into an enterprise that generates stronger and more profitable top-line growth performance.
8 of 12 people found the following review helpful
on October 19, 2010
My worst nightmare? That my competition reads and acts on this book before I do. This is transformative, paradigm changing thinking. If you live in a developed country, where many categories/industries are deflating, where professional demographers are projecting declining net disposable (after-tax) household incomes over the next 20-25+ years, and where retailers and many 'customers' now have 'the leverage' (including consumers via the internet and social media), then you had better be out-thinking your competition big-time relative to whether your historical business model, your go-to-market strategy is working and if it is relevant AND differentiated for how your category/industry is transforming. If your seniors have their 'feet planted in history' and are so risk averse they 'keep you, them and the company safe' from making hard calls and driving needed change, then buy this book for them. It's easy to predict history, it is difficult to see and act on the future... and this book does both.
It is 'readable' (by CEOs/CFOs, Strategists, Functional Dep't Heads, Consultants, Academics... and everyone they work with!. The authors drive from Principles and make their case every step along the way. It's one thing to 'preach' about getting demand-driven from supply-driven (many good, practical, and academic, reasons to do it); BUT it's an entirely different matter to articulate with clarity, logic and specifics the "how to's"... they do it here. The difference between this book and (at the time) a transformative business book with wide appeal like RE-ENGINEERING by Hammer is that this is NOT a fad that lasts, say 3-5 years and then another one comes along (i.e., TQM) and trumps or pre-empts it. The premise of this book and its content is as enduring as supply-side economics and business models were for 10+ decades!
I would recommend it to every MBA student, every undergrad business student, every CEO and Board Director... and 60-90% of their employees!
Get on the bus...
or watch as competition leapfrogs you (if they haven't already) by getting demand-driven and doing it with a strategic framework (they call it a 'mental model' in the book) that identifies where the profitable demand is in your category/industry AND how to market/sell against it (where 'supply' becomes an executional productivity driver to satisfy the identified profitable demand by allowing money to be invested in profitable growth). Over time, there is a lot of research supporting that investors value top line (Sales) profitable growth more than gross-margin improvements driven by cost savings/elimination, and this is reflected in company's valuations via higher PE multiples. View 'supply' as a means to an end... that 'end' being driving more consistent, more predictable profitable growth by knowing where the profitable demand is and how to capitalize on it. Hats off to the authors for communicating this in a compelling and 'interesting read' way... with some terrific cases along the way.
on June 29, 2011
Companies have spent millions of dollars wringing every last drop of savings out of their supply chains. This is a good thing. Unfortunately, according to the authors, they have neglected the demand side. Companies could get away with this supply-focused strategy in the past, because demand out-stripped supply. Now, the tables have turned and there is an over-abundance of supply. It's time for businesses to shift their focus.
Doing so is not as simple as merely asking customers what they want, because they don't always know. Companies need to recognize trends and patterns in markets and customer segments to determine what customers will want in the future. The authors provide a recipe for this demand-driven model to include separating markets into customer demand pools (based on profitability and reasons behind purchasing decisions rather than on demographics), and demand-chain integration.
Is your business a fit for this demand-driven model? The authors argue that the concept applies to all businesses - even those that deal in commodities. In fact, to them, there is no such thing as a commodity business - "10 years ago water, dirt, and air were free, omnipresent, and about perfect... Today, thanks to an understanding of demand, they are three of the fastest and most profitable product categories in the business world. Yet nowhere is there more supply than in water, dirt, and air."
This book will challenge you to think about ways to improve your business and provide creative ideas and instructions for doing so.
-- Nick McCormick, Author, Acting Up Brings Everyone Down.
on December 23, 2013
Both authors master the science of demand and show you with a simple language and nice examples how to manage your company to benefit from costumers satisfaction. The book introduces simple tools that can be very insightful when running a business.
On the otherside, I wish some of the methods were better detailed. I'll start working at Nielsen in two weeks, and after reading this book I'm really excited about my job.