Do you really need a strategic plan?
The surprising answer may be “no,” especially when you’re starting up. Consider how things went for Enterprise.
Today, Enterprise is the largest car rental company in the world. But it didn’t start out with a strategic plan. It didn’t even start as a car rental company.
When Jack Taylor came home from World War II, his first success was starting a business delivering packages for department stores. Business was good, but the hours were horrendous and Jack had a growing family.
Arthur Lindburg stepped back into the picture. Lindburg owned the local Cadillac dealership. He had tried several times to hire Jack. This time Jack said, “Yes.”
Taylor didn’t join Lindburg because it fit a strategic plan. He wanted to make good money and still have time for his family.
Soon Jack Taylor was the sales manager for the dealership. Other dealerships kept trying to hire him away from Lindburg. He had the opportunity to purchase his own dealership. And he was thinking about starting an auto leasing company.
Taylor chose the leasing company. It wasn’t part of a grand strategic plan. He thought it was the best opportunity.
He didn’t want to work for another dealership. Plus, he thought that leasing had a bigger upside than owning his own dealership.
Back then you could only own one dealership in one town. Jack figured he could set up leasing operations in lots of places. Plus he wouldn’t have to carry car or parts inventories.
He came up with a bunch of his own money, made a deal with Lindburg, and started Executive Leasing in the basement of the Cadillac dealership. It was a great success. But Taylor noticed something interesting.
His leasing customers kept asking him to provide rentals for friends or relatives who came to town on business. It seemed to be happening more and more.
The reason was the explosion of domestic air travel. More people were flying to distant towns. When they got there they wanted to rent a car. That wasn’t part of any strategic plan, but Jack Taylor knew an opportunity when he saw one.
He named his rental company “Enterprise” after one of the carriers he flew off during World War II. By the end of the 1960s, Enterprise was very profitable, but far smaller than the major players in the industry.
Those companies had the resources to pay for expensive airport locations. Enterprise was stuck in the local rental market.
Then, the courts ruled that auto insurance companies should provide loaner cars for their customers whose cars were out of service. Since then, the local auto rental market has grown faster than the airport market.
All along, from the days of Executive Leasing, Jack Taylor wanted his company to provide excellent and distinctive service. That was the core strategy.
Because he was clear about how he was going to compete, Jack Taylor could spot the opportunity in changes around him. He could spend his energy and resources on ways to do things better.
That led to one of the most effective management training programs in the world. It’s led to compensation and promotion that are tied to a very simple measure of customer service.
All the way along there was a simple strategy. That strategy guided operations. It helped opportunities stand out from the crowd. Enterprise succeeded with a ruthless focus on a simple core strategy.
You’ll find more details on the strategy of Enterprise and more than twenty other companies in Ruthless Focus: How to use key core strategies to focus your business
