Tricks that reveal a company's Achilles' heel
FILA, the Italian sportswear firm, was not always a giant multinational enterprise. In the mid-1970s it was a fledgling organisation that had pinned its future in tennis apparel on a manufacturing and licensing relationship with our client, Bjorn Borg.
Early in the relationship, the Fila people realised the more of Borg's time they could get for promotional purposes the better their investment. So they came up with a very clever tactic - which internationally became known as ''the Fila trick'' - for gauging Borg's availability.
They would ask the same question, usually concerning what Borg would or would not commit to in terms of time, of a half dozen people in our company.
Since they were dealing with us all over the world, they got quite good at this. They would use what they were told in Australia to their best advantage in Japan; they would use what they were told in Japan to their best advantage in England; and so on in Paris, Stockholm and Milan, until they circled the globe.
We were always amazed at how much the Fila people knew about Borg's schedule until we realised their secret: they had figured out a weakness in our organisation - namely that our various foreign offices didn't always talk in a co-ordinated fashion with one another - and used it against us.
This episode taught us two things. First, our offices needed to communicate more frequently and effectively and second, we learned that every organisation has chinks in its armour - if you can find those flaws, you can cut any organisation down to size, no matter how inscrutable or imposing it may seem to an outsider.
Lack of institutional memory is another weakness in companies.
I've always thought that some of the most valuable people in a company were its ''historians'' - the people who have been with a company for 30 or more years and remember many of the details from an earlier era.
In some cases, these veterans may not be as active or productive as they used to be, but they still provide a golden service. In meetings they can give you perspective and a historical frame of reference.
If your ''young Turks'' come up with a wild idea, it is nice to have a sage in the room who can say, with great authority, that the idea is not so new, that the company tried it 20 years ago, and then recite five reasons why it didn't work then and probably won't work now.
People like this are a company's institutional memory. They are priceless.
Times change, however. With all the downsizing and early retirements, as well as the general increase in executive mobility, I've noticed that a lot of companies have lost their institutional memory. Not only are their veteran executives gone, but the people you dealt with four or five years ago have also moved to other jobs at other companies.
This hit me the other day when a foreign publisher expressed an interest in certain rights to a five-year-old book by an author we represented. Unfortunately, the book's original American publisher controlled those specific rights - and getting them backmight have cost us more money than we would make on the new sale.
Then one of our executives made an interesting observation: none of the people involved with the book were still employed at the publishing house. The editor in chief who bought the book, the CEO who authorised the large cheque, and the editor who editedthe manuscript had all moved to rival publishers.
The new people there were probably so busy with their own current projects, they didn't have a clue about the rights they held to the book, and they probably didn't care.
Our executive took his point a step further. With no interest in or memory of the book at the publishing house, we could probably resell the rights in question and no one would know or care. Our legal department quashed this idea immediately.
But the insight emboldened us to approach the publisher about relinquishing the rights - which they did for nothing. I doubt if things would have gone so smoothly if someone involved in the original contract were still there.
I suspect this diminished institutional memory can work to a lot of outsiders' advantage. If you haven't called on a company in recent years because they have always turned down your ideas or you think their key people aren't interested in you, perhaps it's time to knock on those old doors again.
There's a good chance that a new face will be waiting behind that door - and the old faces who remember you may be long gone.
Also, every company has people who have personal agendas that sometimes differ from the company's agenda. If you know that about a person at that company, you can sometimes get him to agree to your terms merely by catering to his personal agenda.
I know this is true because people have employed this tactic on us.
For example, we once had a sales executive who brought in a lot of deals every year. This was a virtue and a flaw. It was a virtue because he closed a lot of sales and brought in a lot of quick revenue.
It was a flaw because he was too quick to agree to the other side's price. He couldn't walk out of the room without a deal. As a result he didn't always get the best price for our clients and properties. He left a lot of money at the table.
If he was more patient, if he was willing to leave the room and wait a month or two when the customer was more eager or if he was more creative about adding other features that involved other parts of our company to the deal, he could have obtained a much better price.
The flaw was actually mine - because of how I judged his performance. Since I based his compensation on how much money he brought into his division, it made sense that he would only sell his division's products.
If I had changed his compensation criteria to include sales he made for other parts of the company, perhaps he would have been more patient and generated bigger sales.
The interesting thing about this situation was that some of the customers he dealt with knew this about him - and so they went out of their way to deal with him rather than with some of our other executives who drove harder bargains.
It was a chink in our armour, and for a few years a few shrewd outsiders benefited from it.