Think of the 80/20 rule ( Paretos Law). Simply put, 80% of the time you wear 20% of your clothes.
80% of the results in your business are delivered by 20% of your team. And, 80% of your business comes from 20% of your customers.
(By the way, the 80/20 rule is exponential, meaning 80/20 to the power of 3 or 4 or 5 etc – that is 80% of 20%, then 80% of that 20% and then 80% of that 20%. Leading to the realisation that out of the 20% of your client base giving you 80% of your business, there is 20% within that 20% that is in a position to give you a lot more business that you are currently receiving from them. How much attention are your deserving most important clients receiving from you?)
Value Creating Disciplines :
” Im going to try keep this simple, short and really informative.”
The attractiveness and opportunities open to an organisation depends on the resources available to exploit them.
Resources include both tangible and intangible assets, capabilities and competencies.
The base from which organisations build their competitive position and any marketing strategy needs to be firmly grounded in these resources.
Every business acquires many resources and capabilities that enable it to move their products and offerings through the value chain. Only a few of these need to be superior to competition.
However, they do need to support the value proposition that is valuable to customers and ideally hard for competitors to match. ( Another time for that piece.)
There are different ways to deliver superior customer value. These are Value Creating Disciplines and are best defined as Operational Excellence, Product Leadership and Customer Intimacy. ( Treacy and Wiersema )
Research has shown that the most successful organisations and industry leaders deliver exceptional value and performance in one of the core value disciplines.
Leading organisations deliver good performance across the remaining two disciplines but truly excel at being the best at the one discipline, be it product leadership, customer intimacy or operational excellence.
(Research has also proven that companies are way more successful when excelling in one discipline rather than trying for two.)
In our experience, we often find our clients are either spread too thinly, focusing on two or more disciplines or not focused on any given discipline, meaning they are doing a bit of this and a bit of that,. Whilst throughout their departments and teams there is a lack of focus on strategy and in most cases awareness of strategy.
Leading organisations align resources with strategy and strategy is often about growing the business or transforming the business. So essentially aligning tactics, activities and plans with people, skills, resources and moving them in the direction to achieve excellence in in one of the core disciplines which in turn will grow your business and or transform your business.
Growing the business is about increasing performance, driving revenue, gaining market share, increasing profitability.
Transforming the business is about entering into new markets or making an acquisition or releasing a totally new product line.
There is also running the business. The day to day duties and activities of the business and this is all about being more efficient, reducing costs and expenses and maintaining existing strengths and existing efficiencies within your business.
As markets change so do the competencies required of an organisation to compete within that market. ( A piece for anther day.)
To provide some context around the three disciplines think of these companies.
Apple, Intel, Nike = Product leadership
Sainsburys, Mcdonalds = Operational Excellence
HSBC and RBS = Customer Intimacy
Operational Excellence : This strategy requires an organisation achieves excellence in core processes of order fulfilment, supply chain management, logistics, service delivery and transaction processing. This is about process innovation. You innovate your operations to deliver services and offerings in a more efficient way to the customer. In turn, you reduce costs, reduce time being spent on medial tasks.
Core Requirements :
Efficient management of people, efficient transactions, dedication to measurement systems. A focus on quality and cost control. Your aim is to reduce operating costs and improve cost to performance on technology. You are looking to maintain efficiency. Think of Amazon and their logistics, ecommerce and payment systems. Literally everything is automated. IoT is another very good industry to spark ideas that could work for your business regardless of the industry.
A good philosophy is Kaizen – Constant and never ending improvement.
Product leadership : Achieving market dominance through major technology advances , rapid product variations, continuous price reductions and a willingness to attack competitors on price and product performance. It’s about product innovation and development. Think of Samsung or Dell or Apple. Samsung operate in multiple industries, medical being one where they are constantly pushing the boundaries and developing and introducing new technologies into the market.
Core Requirements :
Include market sensing, , openness to new ideas, fast product development and launch. Drive to lead and educate the market on innovative product leadership. The organisations future prospects lie in its talents of design people and those who support them.
Customer Intimacy : Your company must become obsessed with understanding the individual customer in detail. Your business is massively customer orientated. Your products and services are orientated around helping serving your customers on demand. You dont just sell a product but the way you run your business is all about giving your customers exactly what they want.
Core Requirements :
A core business practice that results in deep customer understanding. A philosophy of have it your way mindset and mastery of customisation within your business offerings.
What’s important, Cycle time – Measuring the time between awareness of customer need and delivery, and product or service development time.
Product identification – The ability to identify new products or services required by customers.
Do your resources and capabilities support your business strategy?
Next LMS Focus : Identifying current and future competitor positions :
Positioning starts with a product. A piece of merchandise, a service, a company or even a person. . . But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.
Think of this …. You don’t buy paper, you buy news. You don’t buy coal you buy heat. – read more tomorrow.