I think most organizations have the opinion that if we improve they will make more money. They think through operational improvements or becoming better, faster, cheaper in itself is a winning formula. There are a few basic problems with that premise:
- You have to improve at a faster rate than your competition.
- You have to improve on things that matter to your customers to retain them.
- You have to improve on things that matter to the market place to acquire them.
- You have to be able to support both the new and old items of improvement.
I am sure there are more but my point is better, faster and cheaper is not a game changer anymore. So, what do we do, innovate? Even with innovation we go through the same scenario as above, just with a little more risk involved.
The fact is most companies try to do too much. They want to match the competition with every feature and do it better, faster and of course, cheaper. I see this strategy many times and always joked with salespeople that if we had the best product at the best price and in stock, what would you use as an excuse? It is not about differentiation even. It is about doing what your customer wants you to do well and permitting yourself not only to be average but maybe even terrible at things they don’t care about.
In the field of Appreciative Inquiry, I find many of the same thoughts. We are not looking for areas of deficiencies and improvement but to expand on the areas we do well in. If we are looking for a sustainable competitive advantage, should we be viewing our organization from its positive core versus the negatives?
When you look at the way many companies are succeeding today, it is in exactly this manner.
- Low cost airlines; Ryanair, Southwest Airlines
- Software Producers: 37 Signals, Zoho
- Apps: All of them just about
- Baseball: Oakland Athletics
The Oakland Athletics did this and described in the book and movie Moneyball. Billy Bean looked at the things that mattered (on base average). Other parts of the game, that had limited exposure such as fielding or speed, he disregarded. He ignored conventional baseball wisdom.
Most organizations try to do the same old thing. Need to increase sales, hire your competitor’s superstar! What if you considered what really matters to your customer? Does he value technical expertise more? Or maybe, he wants someone more literate in finances?
In the book Uncommon Service, the authors state:
Our message begins simply enough: you can’t be good at everything. In services, trying to do it all brilliantly will lead almost inevitably to mediocrity. Excellence requires sacrifice. To deliver great service on the dimensions that your customers value most, you must underperform on dimensions they value less. This means you must have the stomach to do some things badly.
The concept can seem immoral at first blush. We recently did some work with a major health-care provider. The CEO wasn’t able to join us until the last couple of days. When he arrived, we reviewed what we’d covered, including the link between underperformance and excellence. The CEO immediately pushed back, saying, “I don’t see anything we could afford to be bad at.” He continued, revealing that he saw the idea of lowering the bar on any dimension as dishonorable, particularly in a field like health care.
Hands immediately shot up around the room. His team disagreed, and after listening to their ideas for where tradeoffs could be made — where resources could be shifted from areas low on the customers’ priority list to areas customers cared more about — the CEO finally backed down. “I get it,” he said. “That’s how we can afford to be great.”
The authors suggest viewing your organization in this manner:
- Your service offering: How do customers define “excellence” in your offering?
- Your service funding mechanism: How will you get paid for delivering excellence?
- Your employee management system: How will you prepare your employees to deliver excellence every day?
- Your customer management system: How will you get your customers to behave in ways that improve their service experience?
Looking for a Game Changer? Start underperforming!
P.S. Most companies are reluctant to put this kind of trust in the customer.
If the facts don’t fit the theory, change the facts!
What happens when the factory goes away?
Compressing your Value Stream for Unprofitable Customers
Are you focusing on your customers conversations?