Marketing Myopia

I am working towards my MBA in an effort to get me out of hell. At the beginning of marketing class we had to read the article, “Marketing Myopia” by Theodore Levitt. This is an incredible article. He talked about defining your company and being customer-oriented rather than product-oriented. Failing to do this causes companies to not grow or fail. I see this all of the time in the contracting world. These small companies do not know who there customer is or how they want to brand themselves.

My first job out of the military was as a program manager for a small contracting company. The president was an engineer who’s specialty was in embedded work in C and C++. His main focus was to do only embedded, C and C++ development. One of its first big clients was for an office doing embedded coding in C and C++. As the company started to grow, it brought in non-engineers to do recruiting, business development and program management. We “outsiders” saw that this was risky. the company was putting all of its eggs in one basket. In this environment, contracts can end without notice and next thing you know, you have a dozen or so people sitting on the bench eating up overhead dollars.

There were other opportunities out there to grow the company if it would expand itself into other areas. The president would not allow it. He did not want to do Java, he did not want to do web page development, or networking, or anything else. His mantra continued to be “Embedded C and C++ development.” Eventually, the scenario from above happened. Contracts ended for one reason or another and we found ourselves with a lot of overhead charging. The customer had decided to not hire contractors to do embedded work but instead hire their own employees for this type of work. The eggs were being tossed out of the basket.

The company’s ten year anniversary was on a Thursday. A lot of “rah rah” and “the future is bright” talk. As a gift, we all received travel coffee mugs with the company logo. The next day, I along with the other program manager and the recruiter were all let go. We were hurting the company financially. The VP for Business Development had left the month prior and the company was not growing, a lot of overhead. As a joke, I tell people now to never take the coffee mug when attending company all-hands meetings. It’s a trap to figure out who should be laid-off.

At its high point, the company employed almost 50 people. It had went from 10 to almost 50 in about 18 months. Now, it is back down to right around 20 with a lot still on overhead. This is all because the company defined itself very narrowly. It did not see itself as an IT company or even a software development company. It was a embedded, C/C++ company. A broader definition would have allowed it to expand into other areas and more easily absorb the overhead costs. It fell into the same trap Mr. Levitt described when talking about railroad companies in the mid 1900s. They defined themselves as railroad companies not transportation companies. This caused problems as other modes of transportation arrived in the 1900s like trucks and airplanes.

I don’t do business development or marketing work – yet. But when I do, my first questions will always be “Who is your customer?” and “How does the company define itself?” Someday.

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