"If you think you can
or you think you can't,
you're right."

Henry Ford


"None of us is as good as
all of us."

Ray Krok
Founder of McDonald's


"It is the dull man
who is always sure.
The sure man
who is always dull."

H.L Menchen


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Who's your Daddy?

It is important to avoid the trap of defining what kind of company you are, without reference to what kind of company the marketplace wants you to be.

In 1995, Nordic Track was a $500 million fitness equipment company that made cross country ski machines. Their image was at the top of the reputation charts. When you said “Nordic Track” in focus groups, the focus groups said, “Quality.”

Eventually, however, most people who wanted one of their ski machines had one, and their revenue started to stall and decline. Nordic had two options: 1) Do whatever was necessary to remain a big, prestigious $500 million company, or 2) Leverage their brand reputation in the quality end of other exercise equipment categories, which would mean becoming a smaller, less prestigious, but more profitable company.

They chose the $500 million route.

To get there, they had to enter the lower



ends of categories where price competition was more prevalent. To meet the lower price points, they had to cut quality. Suddenly, a high percentage of theirproducts that went out the door came back from disgruntled purchasers. After a few years, when you said “Nordic Track” in focus groups, the focus groups said, “Junk.”

In 1997, Nordic Track closed its doors. (There was no bailout money back then).

The moral of the story goes without saying. Don’t define your business in a way that fits a preconceived self image that might make you feel good for now. Define your business in a way that represents value to the marketplace available nowhere else. The profits you enjoy can be plowed into expanding that quality image in flanker categories, or into starting whole new companies in categories where a reverence for quality leverages higher pricing, margins, and profit.

Who’s your Daddy? The marketplace.