In order to win consistently, a company must establish and maintain leadership in some fundamental business competency; three of the most important are operational efficiency, innovation and customer connections. Which path offers your company the best opportunity to win? Consider the implications of each:
OPERATIONAL EXCELLENCE: The company has superb execution, often marked by reasonable quality provided at a very low price. The focus is on efficiency, streamlining operations, supply chain management, no-frills, volume counts.
PRODUCT LEADERSHIP: The company is very strong in innovation and product marketing, operating in dynamic markets. The focus is on development, innovation, design, time-to-market, and producing high margins in a short timeframe.
CUSTOMER INTIMACY: The company excels in customer attention and customer service, tailoring products and services to individual customers or narrow niches. The focus is on CRM, staying close to customers and their needs, delivering products and services on time and above customer expectations, creating emotional connections with the brand, and operating on lifetime value metrics.
A number of large international companies have established their identities around operational excellence. Their success is predicated upon channel power and long-term cost advantage – advantages which are only available to a few. So, particularly for challenger brands and companies operating in dynamic competitive environments, winning through operations isn’t a viable option.
Product-driven leadership presents a far easier path for winning in the short term but is tough to sustain. Can your company consistently win on product innovation, particularly in an environment when investment dollars are tight and competitors can respond so quickly? Or is it more likely that you and your competitors tend to be locked in a back-and-forth battle to stay ahead of one another for brief periods of economic advantage?
Winning through customer intimacy is a much higher-probability path for most companies. It depends less upon raw channel power, infrastructure or existing market share (as is the case with operational excellence) or even the expensive hand-to-hand competitive combat of a product-driven strategy. Customer intimacy can be achieved by companies new or established, large or small, in nearly any industry – it’s an issue of management focus, the smart use of customer information, and the right tools and incentives in place for those who interact with customers every day.
Has your company defined its game in a way that is likely to consistently produce wins?
