Thriving Under Attack

When we read the fascinating accounts of the earliest settlements in America, we learn how the inhabitants were able to thrive in their new and fiercely inhospitable land. In spite of their independent spirits, they kept their businesses and homes near a fort. In spite of the fact they had their own self-interests, they were steadfastly supportive of their community.

The balance between their independence and collaborative action is part of why we are able to live and work in America today.

By many accounts, the environment DME providers work in today is also characterized as inhospitable. Yet this industry’s participants have not yielded their strong independent spirits to collaborative actions that will allow the industry to thrive. As a result, providers are facing the current assaults on their company alone, without a refuge, and can be picked off one-by-one.

As Ben Franklin warned his fellow revolutionaries, they would “all hang together, or most assuredly we shall all hang separately.”

The reason providers commonly cite for not hanging together is that the risk of sharing proprietary information is too great. As a result, providers have insufficient understanding of the issues that challenge them; there is little to no information available about financial and operational performance on which to build stronger businesses; and, providers’ lobbying effort is not as strong as it could be.

What the earliest settlers were not afraid of could be called “transparency.” If the participants in this industry could become more transparent, there will be great benefits. Among them:

Managers could better measure company performance. So far this week, I have received two requests for benchmarking data from managers in the industry. My response always has to begin with the disclaimer that it is based on information from my company’s clients, not the industry as a whole. Does it help or hurt the industry if all providers have access to performance data?

• Managers can offer less-defensive bids if they understand the potential of rivals better. It is not necessary to know everything about your competitor, but more general information would enable better bidding, which, in turn, could preserve profitability.
• Managers would learn of “best practices,” those that create the greatest measurable impact. Today the industry has to benchmark to norms, which is another way to say “average” or “mediocre.”
• Managers would be more creative. Information is the basis of creativity. Today creativity in our industry is basically limited to the isolated individual experiences of employees. A more collective and collaborative effort would produce more effective solutions. (“More effective” can be defined as “more profitable.”)
• Greater transparency fosters greater cohesiveness. Greater cohesiveness can be used to apply more force to make good situations better, and to make bad situations less bad.
• Greater transparency can strengthen lobbying efforts. Today we give our lobbyists anecdotal information and expect them to be effective. What they need is empirical information to prove the case we want them to make.
• Making the industry more attractive. President John F. Kennedy made famous the saying, “A rising tide lifts all boats.” Some may argue if a provider shares better ways to do things and rivals adopt them, they become better competitors. So what? It may force the giver of information to become better but, if so, the whole industry becomes better, and, if not, the whole industry is still better.

Consider real estate and banking. Companies in these industries voluntarily share massive amounts of data about their operations. They know that the information will be used by their competitors, but they also know that a stronger industry will make their own companies stronger.

Being more transparent doesn’t mean providers should be foolish in opening their books to the industry. Transparency can be accomplished by sharing data in ways that are not so specific as to reveal real trade secrets. Other industries have become much more transparent than ours — and much more powerful.

Wallace Weeks is founder and president of Weeks Group Inc., a Melbourne, Fla.-based strategy consulting firm. He can be reached at 321/752-4514 or by e-mail at [email protected].