A New Way to Think: Your Guide to Superior Management Effectiveness

Imagine walking into a bustling store, shelves lined with countless brands vying for your attention. The true battleground of business competition is here, not in the distant corporate offices where executives debate strategy. Competition happens at the front line, not at the head office. This simple but profound insight reshapes how we think about business success. Customers choose between products like shampoo brands—Pantene, Dove, Fructis—not between the companies behind them. This means that the real test of competitiveness is whether a product wins the customer's choice at the moment of purchase.

Yet, many organizations are structured like armies, with a hierarchy that assumes the generals at the top direct the battle effectively. In reality, this hierarchy often imposes costs and delays that hamper frontline agility. Each layer above the front line adds coordination overhead and direct expenses—managers, support staff, offices—that must be justified by the value they add. If they don’t help the frontline win customers more than they cost, they become a liability.

Consider a large consumer goods company that had layers of management between its corporate center and individual brands. Each layer was supposed to provide scale advantages—shared distribution, consolidated advertising, deep consumer insights. But if these services didn’t sufficiently enhance the brand’s competitiveness at the shelf, the layers only drained resources. This led to a rigorous evaluation: What key capabilities does the corporation bring that truly help each business win? Which businesses and brands fit well with these capabilities? And which layers add value or just cost?

The answer was often surprising. Some businesses, though profitable, did not benefit enough from corporate resources to justify their place in the portfolio. These were divested. Layers that failed to add net value were eliminated, streamlining decision-making and empowering those closest to customers. The famous CEO who championed this approach insisted on visiting customers directly, walking store aisles, and understanding their experiences firsthand. This hands-on approach ensured that corporate strategy stayed connected to the realities of customer choice.

So, what does this mean for leaders? It means shifting focus from managing complexity at the top to enabling value creation at the front line. It requires treating the layer below as a customer, demanding that each level adds clear, measurable value. This mindset drives a continuous cycle of evaluation and adjustment, ensuring the organization stays lean and focused on winning where it counts.

As we move forward, we’ll explore how this customer-centric view extends beyond competition to how businesses prioritize stakeholders, make strategic choices, and organize their work for maximum effectiveness. The next section delves into why putting customers before shareholders is the secret to lasting value creation.