A young married couple, Mr. William and Ms. Dorothy
Hustead, bought a small store in a tiny town near the South
Dakota Badlands. From 1931 to 1936, they struggled through
the Depression serving the town's 326 impoverished
residents.
One day in 1936, Ms. Hustead, bothered by the sound of cars
on the nearby highway heading for Mount Rushmore, persuaded
her husband to expand their business to serve these
travelers. Mr. Hustead put up signs on the highway to draw
visitors to their store, making a unique appeal. The signs
said, "Free Ice Water . . . Wall Drug." In those days
before automobile air conditioning was common, that offer
was a powerful appeal.
Beginning from this humble expansion of its customer base,
Wall Drug now serves more than 20,000 visitors a day during
the summer in its Wall, South Dakota, store and many more
on its Web site.
Let's return to Wall Drug in the 1930s to explore expanding
a for-profit business's scope and concept. People heading
for the Black Hills also needed services.
Wall Drug could have checked car radiators to see if they
needed more water and could have helped tired travelers
make motel reservations, plan side trips to little-known
attractions, obtain referrals to South Dakota physicians
and dentists, and acquire local towing insurance for their
cars.
While the free ice water was welcome to hot, tired
travelers, Wall Drug failed to appreciate that such
travelers were primarily trying to enjoy a nice vacation
and would have welcomed many reasonably priced,
vacation-enhancing services. Wall Drug could have offered
some of those services for free to the travelers by relying
on commissions from motels, attractions, and insurance
companies.
While checking the radiators, Wall Drug would have found
plenty of cars that needed gasoline, oil, filters,
windshield wiper blades, spark plugs, and other minor items
that could have been provided after the radiator water was
checked. The Husteads would have benefited by realizing
that they were also in the business of improving vacation
travel, rather than only selling pharmacy items.
Nonprofit organizations are often similarly too narrow in
their thinking. I have visited many food distribution
centers for needy families, but don't recall ever seeing
such a center that provided a way for the unemployed to
find work.
While hundreds of families are lined up for the groceries,
a separate set of volunteers could be helping match people
to available jobs in the area. Volunteers could help those
with limited reading and writing skills to explore lists
and fill out applications. Cellular phones could be shared
to make job interview appointments.
These centers should see their role as helping the needy to
be able to provide for their own needs. As the Chinese
proverb says, you do more good if you teach someone to fish
rather than just providing a fish for today's meal.
As an example of how more can be accomplished by thinking
about other ways to help, Habitat for Humanity found that
it could multiply its global efforts by encouraging
national organizations to send one-tenth of the money they
raise to other countries.
While a new home in the United States might cost $50,000 to
build, an African home might cost only $500. By sharing 10
percent of the money they raise, a U.S. affiliate can
increase the number of families served by their funds as
many as 10-fold.
In addition, the Habitat families and volunteers learn to
build homes, take care of the homes, and help others build
their homes. In many cases, the families and volunteers can
then find work in home building and related trades. As the
no-interest mortgages are repaid, poor families are also
providing funds for other poor families to use.
What's missing to have the right scope and concept?
Organizations are focused on providing more of what they do
today rather than considering what those who receive the
products and services really want and need. Naturally,
organizations need to focus. Taking on the wrong additional
products and services can create havoc with the economics
of a business or nonprofit organization and leave everyone
worse off.
Copyright 2007 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of six books including The 2,000 Percent Squared
Solution, The 2,000 Percent Solution, and The Ultimate
Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .
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