A company’s strategic style, whether focused on operational excellence, product leadership, or customer intimacy, shapes its value proposition, culture, and employee behaviors, ultimately driving customer satisfaction and profitability.
Primary Implication
The strategic style you choose to do business with defines the why for everyone associated with your company.
No business can do it all, nor can they be all things to all people, so you must play to your strengths by doing what your business is modeled to do best.
The hard reality is that if your employees aren’t clear on the strategic style your business leads with, they will waste resources and jeopardize your ability to produce your products at a profit.
Overview
In the book, Discipline of Market Leaders, by Michael Treacy and Fred Wiersema these brilliant authors identify that the source of value creation a business elects to build from defines the company’s strategic style. They then help us see how customers search for one of the following three sources of value from those they choose to buy from:
- Operational Excellence is process-centric and operationally competent. Their focus is BEST TOTAL COST.
- Product Leadership is knowledge-centric and product differentiation. Their focus is BEST PRODUCT.
- Customer Intimacy is relationship-centric and customer-responsive. Their focus is BEST TOTAL SOLUTION.
The driving benefit to you, your customers, and employees is how having a distinct strategic style creates clarity. Not having one results in confusion.
When a company’s leaders fail to clarify their business’s strategic style, customers and employees become confused. It is particularly costly to customers when their expectations are not matched, or the company’s employees don’t know how to deliver the expected value.
The strategic style you abide by shapes your business culture and the behaviors of everyone associated with your company, from your employees to your customers. No company in the world is a leader in all three disciplines: Operational Excellence, Product Leadership, and Customer Intimacy. Your goal is to be world-class in your chosen discipline, and very competitive in the other two disciplines.
The strategic style you choose to do business with defines the why for everyone associated with your company. It’s best determined by how you define the who, what, when, and where for your business. You simply can’t do it all, nor can you be all things to all people, so you must play to your strengths by doing what your business is modeled to do best.
Precise clarity on the why gives you the ability to teach your employees why what they do matters to the customer. The hard reality is that if your employees aren’t clear on the why behind what they do, they will waste resources and jeopardize your ability to produce your products cost-effectively. This is a particular killer if your strategic style is operational excellence, and you are competing actively on price.
If your customer service doesn’t meet expectations, your customers won’t keep coming back with repeat business, nor will they refer you to others. This is a sure way to go out of business, particularly if you are competing actively on customer intimacy.
Determine your strategic style, then use it to anchor your customer value proposition, while helping your employees understand how to perform with excellence so you can maximize your business profits. Employees want to be part of a winning team; they are looking to you for leadership and guidance give it to them by helping them know what your strategic style is.
