Tag Archives: competition

Effective Visions

For those senior executives seeking to develop a new vision for their firms, I offer these key attributes of an effective vision. The effective vision should:

  • Be differentiated. Is the vision substantially unique when compared to competitors and substitutes? Does the vision avoid the “motherhood and apple pie” trap?
  • Instigate change. Is the new vision aligned with a change strategy? Are we trying to “fix” something that could not be addressed with the prior vision?
  • Be inspirational. Does the vision attract people? People include clients, client prospects, employees, recruiting candidates, and people in the general community.
  • Be motivational. Does the vision cause people to enthusiastically jump out of bed each morning to help realize the vision?
  • Be enduring. Does the vision reach far into the future? How enduring is the vision? Will it catch a mega-trend in the firm’s chosen markets? The duration of an effective vision should be measured in decades, not single digit years.
  • Be out of reach. Is the vision impossible to attain? If it is, then the vision is something employees will always strive to achieve. The vision will last beyond the lives of each generation of the firm.
  • Be measurable. How do we know we are making progress? Is there something tangible that is not subject to interpretation?
  • Be aligned with a human resource strategy. Will the vision cause employees to behave the way we want? Will the vision attract and retain the people we want? Do we expect the vision to drive out the people we don’t want? Is it okay for people to opt out and leave the firm?
  • Be proudly shared. Is the vision one which can be whole-heartedly share inside and outside the firm? How will clients, recruiting prospects, competitors, and the population at large react to our vision? Does the vision align with the firm’s brand promise?
  • Be easy to articulate. Can people consistently communicate the vision without stumbling or fumbling?

Some examples of what I consider to be effective vision statements, which admittedly do change over long periods of time, include:

  • Coca-Cola: A Coca-Cola within reach of everyone in the world.
  • Apple Computer: A computer on every desktop.
  • Honda: Three Honda motors in every household.

For more about effective visions, please feel free to contact me at rowland.chen@gmail.com

Patterns of Improvement

Introduction

Here is a quick survey to gain an understanding of your experiences and points of view on the topic of improvement methodologies over the past few decades. There are nine questions. All readers will benefit from your knowledge if you post your answers and remarks as a comment to this blog. Thank you ahead of time for your contribution to the knowledge base.

Context

I have worked on dozens of business performance improvement efforts with the management of some of the world’s leading firms. During that work I helped implement several improvement methods including quality circles, total quality management, natural work teams, work elimination, business reengineering, business transformation, six sigma, lean, and lean six sigma. Needless to say, there was a wide range of results.

This brief survey draws out your own experiences and learning from improvement initiatives with the intent of developing ways to improve improvement methods themselves. And responding to the survey helps build the collective knowledge of like-minded people.

Please take the time to participate and help other improvement practitioners.

Patterns of Improvement

Below you will see four patterns (plus a blank) which depict profiles of the effectiveness of improvement methods plotted against what I call the “intervention lifecycle”. Each pattern reflects a firm’s experience with any improvement method. Note that a maximum efficacy is reached in each pattern of improvement with varying speeds. The difference among the patterns is what happens after the maximum is reached.

  • Pattern A represents a true continuous and sustainable improvement method.
  • Pattern B shows a big bang upfront followed by a rapid falling off of results.
  • Pattern C depicts a slow decline of efficacy after reaching the maximum.
  • Pattern D waxes and wanes in a sawtooth profile after reaching maximum efficacy.
  • Pattern E is any other pattern you have experienced.

Questions

  1. Which patterns most closely resemble your experiences at companies with which you have worked either within the companies or as a consultant?
  2. What were those companies?
  3. Is there another pattern you have experienced that is not depicted?
  4. Why did you select the particular patterns you picked?
  5. What caused those patterns to emerge?
  6. What worked well?
  7. What do you think might have been done to improve the improvement methods being implemented at the time?
  8. What, if anything, had been done to ensure true sustainability (as in pattern A)?
  9. Any other comments you would like to add?

Thank you again for your participation.

The 6th Dimension of Competitive Advantage

high jump photoThe previous blog entry is incomplete.

There is a sixth dimension for ever-increasing competitive advantage. This sixth dimension is a firm’s capabilities to improve. Along this dimension, there is an infinite supply of possibilities, thus firms do not compete in a state of scarcity. However, a firm must provide the environment and the tools conducive to sustainable improvement.

A firm’s culture (accepted behavioral norms) must support all employees in their pursuit of the implementation of improvement ideas. And improvement methods must be ingrained in daily habits at all levels of the firm from the frontline to the executive suite. All employees should be “on alert” to continually seek out, find, and implement improvements with positive financial benefits. A firm has the accountability to establish channels for the thousands of improvement ideas to be vetted, integrated, and executed with a high degree of coordination.

The truly advantaged firm develops or adopts innovative ways to improve at least one step ahead of its competitors. The concept of first to market applies here. The first among industry competitors to successfully implement an effective improvement method will gain significant advantage. The first to find the holy grail, a truly sustainable improvement method, will achieve long term sustainable advantage.

So, 6 dimensions exist for ever improving competitive advantage not just 5. The sixth being the capability to improve in advance of all others.

Ever-Improving Competitive Advantage: Hitting the 5 Dimensions

Mario Andretti Watkins Glen 1974A firm exists in competitive environments along several key dimensions. Each dimension (or metaphorically, a competitive marketplace) has its own set of competitors acting in their own self-interests. In each dimension, the players compete for scarce resources (customers, marketshare, industry profit share, people, investments, etc.). A firm improves by increasing its competitive advantage along each dimension. These 5 key dimensions are:

  1. Customers
  2. Financial capital
  3. Talent
  4. Extended value chain or value network
  5. Community

A modern approach to improvement:

  • Covers all dimensions simultaneously.
  • Is integrated, holistic, sustainable, high impact, and a whole slurry of other buzzwords
  • Allows improvement ideas from everyone within a firm to fit somewhere, which draws in full participation (“Full Force Improvement”)
  • Has a goal to enable a firm to constantly ever increase its competitive advantage (as in any Olympic athlete who continually strives for better performance)

To gain ever-increasing advantages, a firm must be, or must be perceived to be, more attractive than the competition.

  • Customers
    • This is what people usually think of when they hear competitive market.
    • A firm competes with other firms in the same industries.
    • More attractive offerings (products, services, innovation)
    • More attractive value proposition (benefits versus cost)
    • More attractive long term relationship
  • Financial capital
    • Here the firm competes for limited investment dollars from investors and creditors
    • Competitors include those seeking any number of investment alternatives for investors: stocks, bonds, commercial paper, cash, etc.
    • Gain advantage by providing more attractive financial returns than alternative investment vehicles available
    • Being more attractive in the stock market drives up stock price
    • Being more attractive in the credit market increases access to capital and lowers the cost of capital
  • Talent
    • The competitors are other employers that require the same skills, experience, and knowledge that a firm requires.
    • The other employers can be from similar, adjacent, or different industries.
    • Competitive advantage includes providing a more attractive work environment, richer total compensation (salary, benefits, wealth creation), and other elements that make a firm a “great place to work”
    • For example, firms like NetApp (Fortune’s 2009 “Best Place to Work”) have an advantage in attracting the best talent.
  • Extended value chain or value network
    • The extended value network includes business partners on both the supply side and the demand side: suppliers, service providers, channel partners, and so on.
    • Good partners are in short supply and a firm gains advantage by being a more attractive partner than other players in the market.
    • Example, Dell is one of the leading channel partners for hard disk drives. Drive manufacturers constantly compete to have their drives picked for the next PC that Dell assembles.
  • Community
    • A firm can gain competitive advantage over others by demonstrating stellar corporate social responsibility.
    • Communities desire firms with a strong sense of CSR.
    • Firms can realize significant tax benefits from state and local governments.
    • CSR also impacts other dimensions such as talent (the feel good factor).

An effective and sustainable improvement approach must be directed towards continually gaining competitive advantage along the 5 key dimensions. A firm can never rest nor ignore others in its ecosystem. The firm must marshall its employees and those in its extended value network to execute strategies for Full Force Improvement.