STAYING AHEAD MEANS CHANGING THE RULES;MAKING COMPETITORS PLAY CATCH-UP THE KEY

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No doubt about it, changing the rules is one of the necessary obligations of a leader. True leaders can simply not afford to rest on their laurels. A sense of security, even at the top, is most perilous for all concerned.

Even when there's great risk inherent in change, it is the responsibility of leaders to shake things up. To be truly successful in the '90s we have to learn how to deal, react, adjust, survive and be comfortable with change. As Jack Welsh, CEO of General Electric says, "Change before you have to."

Look around and you will discover that companies that maintain their leadership positions do so by making dramatic moves that change the rules of the game, by constantly searching for new ways to keep your competitors guessing.

Let's start with Procter & Gamble. Whether it's with new packaging, new pricing policies or new ways of doing business with its trade customers, P&G is constantly finding ways to keep the competition playing catch-up. It single-handedly changed the rules of the laundry category almost overnight by moving to concentrated formulas in both powder and liquid, thereby forcing other competitors to spend huge dollars adjusting, often with adverse consequences.

Look at Gillette, the recognized leader in the razor category. It maintains that position by introducing new technologically advanced products, often at the risk of rendering its own products out of date.

Philip Morris changed the rules on "Marlboro Friday." While reducing its pricing had huge short-term consequences, it turned around a gradual share-loss situation for its flagship brand and forced less able competitors to react.

Warner-Lambert shook up the oral rinse category by introducing new Listerine blue. Already preeminent in the category, the company capitalized on its more therapeutic heritage, introduced a better-tasting alternative, and forced P&G's Scope to market itself on price.

These industry leaders were wise enough to protect their future by changing the rules. These are a number of time-honored ways in which a leader can effectively accomplish this:

Introduce a new product that shakes up a category. Like Lever did in soap bars with Lever 2000.

Develop a new technology that makes everybody instantaneously look like yesterday's news. What Sony did with the Walkman revolutionized the industry.

Introduce proprietary packaging. This prevents low-priced competitors or private label manufacturers from saying "we're the same, just cheaper." A good example is how P&G created the no-drip spout for liquid detergents.

Develop a bold, declarative advertising claim. An effective endorsement on behalf of your product demotes all other competitors to the status of second-class citizenship.

Create a unique promotional association that puts your brand at a new level. Nike totally changed the rules for the athletic footwear and apparel category with its integrated relationship with Michael Jordan.

Create competitive pressure through a radical change in pricing. This approach can be very dangerous, as American Airlines found out. But only a leader has the wherewithal to use price as a weapon.

Brand something that was never branded. Think of how Perdue and Intel forever changed their image with the effective use of branding.

Add value for the consumer to enhance the product. Look how frequent flier miles first changed the rules in the airline business and in other pseudo-parity service industries such as credit cards, hotels and rental cars.

It's important to recognize that, as in war, surprise is a key ingredient to success. Once the competition thinks they have the rules of the game all figured out, it's both the responsibility and the obligation of true leaders to change them around-even break them. That keeps everyone else busy playing catch-up.

Leaders who are content become complacent, fat and happy-but only for the short term. Inevitably, they wake up one day and find out that some little upstart they used to laugh about in the corporate dining room is now eating their lunch. Just ask IBM, Sears and AT&T.

So if you want to shake things up and have everyone else playing catch-up, keep searching. Or as Napoleon once said in one of his marketing presentations, "L'audace, toujours l'audace." Loosely translated: Be bold!

Mr. Shevack is president and CEO of Partners & Shevack, New York.

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