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A maximum wow strategy is when a lot of money is spent on something grand, splashy and showy that delivers little or no value to the company or its customers.
A prime example of this is when a company builds an expensive and extravagant off-site corporate headquarters. When I was a young man, my father told me, “Son, beware of your ego. A man’s ego can get him into a lot of trouble and cost him a lot of money. Ego trips are very costly.” Many a company has been severely weakened by a CEOs ego trip of building a lavish corporate headquarters that often was not even needed. The offices they already had were serving the company just fine.
For a counter example I would offer Walmart. Walmart is the largest brick-and-mortar retail establishment in the world by a very large margin. Its corporate offices have for many years been in the top of its warehouses in Bentonville, Arkansas. Top corporate officers are in plain offices with cheap wood paneling and utilitarian steel desks. This proximity to its distribution centers gave corporate officers a profound and intimate understanding of the needs of its supply chain. Walmart developed the most sophisticated automated distribution centers of any brick-and-mortar retailer. These sophisticated automated distribution centers are credited with a large part of Walmart’s competitive advantage over other brick-and-mortar retailers. This is Sam Walton’s legacy. As wealthy as he was, he was a man without an ego. He was a form follows function kind of man. Good enough was good enough. We will save excellence for our customers.
If a competitor had wanted to destroy Walmart, instead of building a gleaming corporate headquarters in the downtown of a major American city for themselves, they would have built and paid for one for Walmart on the condition that they must house their corporate officers there. This would have isolated Walmart’s leadership from the needs of its supply chain and decreased the likelihood that they would have ever built their automated distribution centers costing them their current competitive advantage.
Value is defined as quality divided by cost. So how do we define quality? Is it a large towering building built of the finest materials and sitting on a piece of prime real estate? Or is it proximity, awareness, humility and engagement? I would argue that Walmart’s choice of its corporate offices was the value decision not just because it delivered at a lower cost but also because it delivered a higher-quality leadership engagement for the company.
A maximum wow strategy is company leadership writing big checks and taking on heavy debt to be paid for by the company for ego-driven projects that deliver low value to the organization.