How to Out-Behave Your Business Competitors

June 4, 2007 — -- Business consultant Dov Seidman says in a new book "How: Why How We Do Anything Means Everything … in Business (and in Life)" that companies that are managed with greater integrity and openness than their competitors will find greater success.

Seidman says that in our hyperconnected world, prosperity, security and lasting achievement are found not in outperforming the competition but in outbehaving it.

Memos, financial reports and the inner workings of companies can be dissected easily in chat rooms and broadcast online. With at-the-moment, worldwide news coverage and increasing numbers of avid "whistle-bloggers," almost nothing goes unreported.

The book provides practical advice on how to bring this transparency and integrity to your business. You can read a chapter below.

Chapter 1: From Land to InformationWhere is the wisdom we have lost in knowledge? Where is theknowledge we have lost in information?
-- T. S. Eliot

Sometimes, to look ahead we must look back, in this case, way back,to feudal Europe circa 1335 A.D. In the 1330s, England needed wine.It needed wine because in the century before, Norman fashions hadbecome all the rage and your average noble Joe had given up his dailypint of beer for a glass of vin rouge. It needed wine because wine providedvitamins, yeast, and calories to get the English through the longwinters. And it needed wine because, well, wine is fun. Given that Englandwas too cold to grow a decent grape, the English required a systemof foreign exchange to get their spirits from France. They traded Englishfleece to Flanders for Flemish cloth (the good stuff at the time), thenbrought that to southern France to trade for the fruit of the vine. Luckily,the English controlled both Flanders and Gascony (on the west coast ofFrance) at the time. Thus they were able to trade freely, transport safely,and drink to their hearts' content. For these reasons, and a million otherfeudal details, the French hated the Brits. In 1337, they attacked Flandersto regain control of the mainland, beginning the Hundred Years' War,which really lasted 116 years until 1453, when the Brits were finallyexpelled from continental Europe and went back to drinking beer, ahabit they largely retain to this day.1

What does all that have to do with us, doing business in a high-technologyinformation age? Well, beer is not the only habit that hashung around since the Middle Ages. Back then we were a land-basedworld, and the people who controlled more high-value land than anyoneelse ruled. Land is a zero-sum game: The more I have, the lessyou have; and the more I have, the more powerful I am relative toyou. Land meant crops, and land meant rent from serfs -- tradesmen,farmers, and craftspeople -- who created the goods and consumablesthat drove the economy. There was a one-to-one correlation betweenthe most powerful people and the ones who had the most land. Tothis day, Queen Elizabeth remains one of the richest people in theUnited Kingdom based on her family's landholdings.2 In a time of finiteresources, feudal nobility learned that to succeed and gain morepower, they needed to protect and hoard what they had. They builtcastles with moats around them to protect their fiefdoms, conqueredeverything they could, and built their wealth one furlong at a time,habits that served them well for centuries.

Fast-forward a few hundred years to the birth of the industrial revolution.The invention of machines, powered mainly by the steam engine,brought a host of innovative ways to make things. The rate andscale of manufacturing increased exponentially. A savvy entrepreneurcould suddenly mass-produce goods efficiently and bring them tomarket at lower prices than his craft-guild cousin. Machines created asystematic way to get rich relatively quickly. One no longer needed alifetime to amass wealth or had to risk a dangerous voyage in searchof treasure. Anyone with money to invest could identify cutting-edgeinventions, build an efficient factory to make them (or make withthem), and take market share from his old-world rivals. Initiative andinnovation became wealth, and old gave way to new, all powered bya new investor class able to make money with money. In 1776, AdamSmith wrote "The Wealth of Nations," and capitalism was born.3 Theword capital, by the way, comes from the Latin word capitalis, meaninghead. Under capitalism, you could use your head to get ahead.

As we shifted from land to capital as the engine of wealth, however,the zero-sum mentality of feudal times remained. Capital, too, is finite,and the more capital I had the less you had. With more, I could innovate,expand, and do things that you could not. Capitalists developedhabits of power, certain rules of thumb about how to succeed in the neweconomy. When we had stuff, we hoarded it; we did not share. We didnot give it away; we meted it out and only for high returns. We extractedinterest. For hundreds of years, assets meant power, and to succeed wecontrolled them zealously. Generally, we built a fortress around ourholdings and defended them against all invaders. We dominated markets,protected trade secrets, and made sure everything we did receiveda patent or copyright. We could also control information flow to the market,and so developed a host of one-way communication habits to controlhow it viewed us. We invented the press release, perfected the artsof messaging and spin, and learned to divide and conquer, telling onething to Customer A in one market and something different to CustomerB in another. Company structures mirrored these impulses withcommand-and-control structures and top-down hierarchies. The habitsof fortress capitalism soon permeated every facet of enterprise.

VP OF STRATEGIC PLANNING AND IMPLEMENTATION.
MADE THE NUMBERS 16 QUARTERS IN A ROW.

Instead, we write STAN SMITH, BELOVED HUSBAND, FATHER, BROTHER, UNCLE. HE MADE THE WORLD WARMER WITH HIS SMILE.

Though our jobs may make us wealthy, our relationships give uslasting value and enduring worth. Building stronger relationships, then,can lead to more than success: It can lead to a kind of significance.

Notes

1. "Revision Summaries: The Hundred Years' War -- 1337–1453," ArnoldHouse School, www.arnoldhouse.co.uk/site/pub/Pupils/history/history_rs_100yearswar.html.
2. "The Queen at 80," CBC News, April 20, 2006.
3. Adam Smith, The Wealth of Nations (New York: Bantam Classics, 2003).
4. Daniel Gross, "In Praise of Bubbles," Wired, February 2006.
5. "Google Company Overview," www.google.com/corporate/.
6. Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-FirstCentury (New York: Farrar Straus and Giroux, 2006).
7. In the interest of transparency and full disclosure, it should be knownthat I have long-standing collaborations and commercial relationshipswith some of the companies that appear in one form or another in thebook. I have tried to be fair and impartial in my analysis of them andtheir activities and to be truthful when selecting quotes and anecdotes to use.
8. Matthew Hamblen, "CA's Swainson Outlines Customer Advocate Cuts,"Computerworld, November 16, 2005.

Excerpted with permission from "How: Why How We Do Anything Means Everything... in Business (and in Life)," by Dov L. Seidman. Published by Wiley & Sons, NY. © Copyright 2007 Dov L. Seidman.