I read an interesting book recently about how the most successful companies think and operate in the marketplace. The book was called “The Discipline of Market Leaders” by Michael Treacy and Fred Wiersema. Although it was mostly about bigger businesses, the ideas it promoted apply equally to any sized operation and should be taken on board by owners of any trades-related business.
A summary of the book’s key ideas is as follows.
No company can be successful today if it attempts to be all things to all consumers. Rather, the most successful companies — the Market Leaders — select a unique value that they alone deliver to their chosen market better than anyone else.
The 3 key decisions to be considered by a company first.
1 The value proposition.
What is it that will make us attractive to the customer?
2. The value-driven operating model.
What structure and culture will we need in order to deliver the value proposition?
3. The value discipline.
What will we need to build our operating model and value proposition around in order to become the best in that market?
Next. The 3 value disciplines to be considered
Value Discipline 1. Operational Excellence
Is about providing best priced middle market products with the least inconvenience. Operational Excellence combines the value of low price with an operating model geared to deliver repeated hassle-free service.
Value Discipline 2. Customer Intimacy
Is about fixating on building long-term customer relationships through customisation, delivering specifically what each customer wants. Customer Intimacy combines the value of best service with a flexible operating model that enables doing what it takes for each selected customer.
Value Discipline 3. Product Leadership
Is about offering pioneering products that customers may not know they want/need. Product Leadership combines the value of having the best product with an operating model that continually delivers successive new products.
Key point
No company can simultaneously excel at delivering market leading performance in all three value disciplines. This is because each disciplines requires completely different operating processes, different ways of thinking and behaving. When a company choses one ‘lead’ discipline to excel in they are placed to become market leaders.
Conversely, when a company attempts to excel in all three disciplines they become, at best, mediocre at all and will just drift in the market, failing to make much impact.
Take action.
Where will you focus your business’s Vision and Value Discipline for the future? Pick one corner of the Value Discipline triangle and make it your anchor point, then develop your business processes to deliver on it.
For help in determining your business’s value discipline, contact me at andy@tradescoach.co.nz and we can start a conversation.