What does coffee and capsules have to do with business strategy?
Several years ago, I encountered a business owner that I believed I was in a perfect position to help.
He runs a coffee company similar to Nespresso – they put coffee in capsules and distribute both the coffee machines and the capsules. He has a decent little business but he was not really able to get the growth that he wanted or needed.
I spent time before going to see him studying the machines, the distribution system, the business model, … By the time I got there I knew quite a bit about his business.
After the pleasantries (and a coffee of course) we got down to talking about what he needed (or at least what he thought he needed). We talked about how I could help him and the skills and expertise that I would bring to him and his business.
I noticed that invariably (and frequently) the topic would drift back to what I knew about the coffee business, what did I know about roasting, about the machines, etc.
After a time, I got a little annoyed (I know you should not do that with a client but …) and I asked him how long he had been in the coffee business (over 30 years). Then I said:
Sir, unfortunately – I cannot help you with any of the coffee problems that you might be having. To be quite honest not many on the planet can. But the problem that you have described and I have researched – is NOT a coffee problem! It is a capsule problem and a distribution problem and a business model problem. For those problems, I can help you immensely.
Shortly after I was shown the door. This guy was focusing on my industry and technology expertise. He did not care that his problem needed someone with domain expertise in the area of designing and implementing a new business model and distribution model. He did not realize he is not in the coffee business – he is in the capsule business. And it matters little what is in those capsules.
This is a critical error that many business managers make, large and small. Some focus almost entirely on industry or technology expertise.
Some problems (like developing a go to market model, a strategy, a business model) require deep understanding of the domain and light expertise in technology or industry.
I have seen numerous Project or Program Managers who understand little about the technology behind the project/program that they are managing but do a fantastic job.
In some cases they will do better than a Project manager with technology expertise because they will ask the obvious and the not so obvious questions. This forces people to really think about what they are doing and where they are going.
Next time you go to hire someone, ask yourself – do you want technology expertise or industry expertise or do you really need someone with domain expertise.
Management is a thinking process.
