Authors Michael E. Raynor and Mumtaz Ahmed offer a bit of management and strategy advice that rings true. Three rules for greatness! I couldn’t resist jumping directly to their article, “Three Rules for Making a Company Truly Great” when my April 2013 issue of Harvard Business Review (HBR) arrived.
They looked at more than 25,000 companies over a span of more than 40 years! So, what are those rules for greatness? Here is the short and sweet rule set:
Rule 1 – Compete on differentiators other than price
Rule 2 – Prioritize increasing revenue over cutting cost
Rule 3 – See Rules 1 and 2
Hmm, aren’t these rules a bit general?
The authors rightly tell us, “[these rules for greatness are] foundational concepts on which companies have built greatness over many years”.
OK, foundational concepts are fine, but what did the superior companies do to achieve greatness?
Oops, wrong question. Examining what companies did failed to help the authors distinguish between long-term great, good, and average performers.
It seems that examining how companies thought about what to do identifies habits of greatness in a consistent manner, while looking at what companies did was not so revealing.
“Miracle workers [the HBR author’s designation for the best long-term performers] acted as though they were following our rules, going for deals that would enhance their nonprice positions and allow them to bring in disproportionately higher revenues.”
What about you and your organization?
Are you following the simple yet compelling advice of competing on nonprice factors and favoring revenue building over cost avoidance? Assuming that you are following the program, does your marketing material reflect your approach? Well, it should do so, clearly and emphatically.
Here is an example from my practice. I advise a CEO who is offering a terrific new business program of IT talent acquisition services for small and mid-size clients.
His organization offers an aggressive price reduction approach that is surprising and pleasing his prospects and clients. But, he isn’t leading his marketing effort with a low-price message.
Instead, the marketing approach is to show how their low price as is due to their excellence in PMI program and project management, and consistent incremental improvement derived from the Six Sigma process they follow.
They want the world to know that they are a learning organization that follows excellent processes. Their low prices come from deep thinking, not deep pockets.
The Bottom Line
I’ll bet your business has much more to offer than a low price. Make sure that your prospects understand how you offer excellence in products and/or services. We are eager to help you get the word out. Reach out and contact us. Let’s get started!