The 17 Indisputable Laws of Teamwork Ch 10

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Questions and Answers

What critical business strategy did Montgomery Ward fail to implement, contributing to its eventual bankruptcy?

Focus on profitable partnerships

Practice the Law of the Price Tag (correct)

Invest heavily in local advertising

Adopt modern marketing techniques

Which early challenge did Aaron Montgomery Ward face in starting his business?

Destruction of stock by a fire (correct)

Competition from larger retailers

Inability to secure funding

Lack of interest from consumers

What was the unique selling proposition introduced by Montgomery Ward in 1875?

Lowest prices in the market

Exclusive products for rural customers

Free shipping on all orders

Satisfaction Guaranteed or Your Money Back (correct)

What significant innovation allowed Montgomery Ward to cater to rural consumers effectively?

Buying directly from manufacturers and selling via mail order Signup and view all the answers

Why did Aaron Montgomery Ward shift partners early in his business?

Because his partners lost confidence in the business Signup and view all the answers

What is primarily required for success in teamwork?

Sacrifice Signup and view all the answers

How does the price of success change as one moves towards improvement?

It increases Signup and view all the answers

What does the Law of the Price Tag suggest about teams that fail to succeed?

They don't realize or are unwilling to pay the price Signup and view all the answers

In the context of teamwork, why is time commitment important?

To build strong relationships Signup and view all the answers

According to leadership expert Max DePree, what does a team need to do to reach its potential?

Strive for continuous improvement Signup and view all the answers

What does H. Jackson Brown's Boomerang Theory imply about unselfishness in teamwork?

It results in greater overall team achievement Signup and view all the answers

What mistake did Montgomery Ward and Company make that contributed to their decline?

They believed success would become cheaper over time Signup and view all the answers

What was the initial capital that Montgomery Ward used to start his business?

$1,600 Signup and view all the answers

Which company emerged as a significant competitor to Montgomery Ward in 1886?

Sears, Roebuck, and Co. Signup and view all the answers

What major shift in population dynamics affected Montgomery Ward's business strategies in the early 20th century?

Majority of the population moving to urban centers Signup and view all the answers

What was Robert E. Wood's position when he joined Montgomery Ward?

Vice President Signup and view all the answers

Despite several opportunities, what critical error did Montgomery Ward's leadership consistently make?

Failing to adapt to market changes Signup and view all the answers

What does the 'Law of the Price Tag' suggest about team success?

Everyone must contribute to achieve success. Signup and view all the answers

What is 'destination disease' as described in the text?

A mindset where people think they can stop growing after achieving a goal. Signup and view all the answers

What action did Montgomery Ward fail to take after World War II that hindered its recovery?

Moving retail operations to urban areas. Signup and view all the answers

Study Notes

Montgomery Ward Bankruptcy and the Law of the Price Tag

Montgomery Ward, a long-standing retailer, filed for Chapter 7 bankruptcy in 2000.
The company's failure could have been avoided if leaders had understood and applied the "Law of the Price Tag."
Ward was founded in 1872 by Aaron Montgomery Ward, a salesman who initially used mail-order catalogs to bypass middlemen and sell goods directly to consumers.

Early Success and Innovation

Ward's business started with a one-page price list that was unfortunately destroyed by the 1871 Chicago fire.
He re-established the price list and formed a partnership with colleagues to create the first general merchandise mail-order catalog.
Ward's "Satisfaction Guaranteed or Your Money Back" policy contributed significantly to the company's rapid growth.
The company experienced tremendous growth in a very short time, from a small capital base to a $300,000 revenue within a few years.

Decline and Failure to Adapt

Sears, Roebuck & Co., a competitor, emerged in the late 19th century.
A shift in population from rural to urban areas affected both companies' strategies.
Montgomery Ward failed to adapt to retail store sales as Sears rapidly expanded its retail presence.
Ward's management hesitated to invest in brick and mortar stores when doing so would mean making major structural changes in their business model.
They failed to seize opportunities for expansion and improvement, ultimately costing them market share and profitability.

The Law of the Price Tag

Team failure often stems from a reluctance to pay the price necessary for success.
Success requires sacrifice from every team member; coasting is not an option - Everyone has to give up something.
This price is ongoing, not just in the initial stages of growth. There is no destination where sacrifice stops.
Improving, changing, and staying top-tier all need greater sacrifice and commitment to improvement. There is no price break for success.
Companies or team members who miss this are likely to plateau, quit or fail.
Teams must ensure continuous growth in ability, skill and market position to remain competitive.

The Price of Teamwork

Key ingredients for teamwork include sacrifice, time commitment, personal development, and unselfishness.
Teamwork takes time to build relationships and develop strategies – and isn't an instantaneous process.
High-achieving team members should assess whether personal ambition must yield to collective goals for success.
Leaders should model willingness to improve, invest and make sacrifices for the team. Praising sacrifice of team members helps to encourage it further.

Montgomery Ward's Failure: Example for avoiding mistakes

Montgomery Ward's failure is portrayed as a cautionary tale about the importance of adaptability, innovation and continual sacrifice in business.
The company prioritized short-term gains over long-term strategic adjustments, losing market share to competitors that adapted to changing market trends.

The Revolutionary War's Sacrifice and Success

Historical example of the Continental Army facing hardship at Valley Forge during the Revolutionary War (1777).
Despite terrible conditions and low morale, the army persevered and improved through training and strategic leadership, ultimately contributing to success in the long term.

Conclusion (Summarized)

The "Law of the Price Tag" emphasizes the necessity of sacrifice, commitment, adaption and the continuous price paid for success and team-based growth. Montgomery Ward's story details the consequences of failing to pay the price for ongoing improvement.

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Description

Explore the rise and fall of Montgomery Ward, a historic retailer that filed for Chapter 7 bankruptcy in 2000. This quiz examines the company's innovative beginnings, the importance of the 'Law of the Price Tag,' and the failures that led to its decline. Test your knowledge on this crucial chapter in retail history.