Linda D. Henman, Ph.D.
Does your company help your customers solve problems or to make decisions that will improve their lives? Bentley Motors wouldn’t hesitate in answering that question. Bentley doesn’t build a mode of transportation; it is dedicated to developing and crafting the world’s most desirable high performance cars. Decision makers at Bentley Motors understand that people will pay more for the most desirable high performance cars than they will for something that merely avoids breaking down on the way to work.
They know how to outrun the competition and distinguish themselves through excellence. Like them, you have probably spent some time thinking about and formulating a strategy that positions you to leverage your competitive advantage, but how much time have you invested in defining your exceptional advantage?
People who lead exceptional organizations—agile yet stable organizations that hold on to their core values while responding adeptly to the temporary nature of the global economy—do better. They don’t raise the bar; they set it for everyone else. They understand that being exceptional hinges on excellence in all they do: the strategy they select, the culture they create, and the talent they attract.
Exceptional organizations don’t all offer luxury, however. Companies like Wal-Mart, the world’s largest retailer, differentiate themselves by consistently responding to what their customers want—low prices on a large selection of items, or in their words, “Saving People Money So They Can Live Better.” They offer value, not just low-cost products. However, a couple of years ago, they mis-stepped.
In 2011, to jumpstart lethargic growth and counter the rise of competitors, decision makers at Wal-Mart veered away from the winning-formula mission and raised prices on some items while promoting deals on others. A foray into organic foods didn’t catch on with discount shoppers, and a push to sell trendy fashions and an attempt to cut clutter in stores to attract higher-income customers ended up alienating the company’s traditional shoppers. The chain succeeded in attracting wealthier clientele but at the cost of its original customer base—those earning less than $70,000 a year, which made up 68% of its business. “The basic Wal-Mart customer didn’t leave Wal-Mart. What happened is that Wal-Mart left the customer,” according to former Wal-Mart executive Jimmy Wright. The change of mindset and subsequent fallout cost them dearly. They have since returned to their core business, and the traditional shoppers and profits have returned.
Discernible value separates you from the competition, creating both your competitive advantage and your exceptional advantage. Articulating the value means you go beyond asking yourselves “How?” and start asking “What?” and “Why?” What do your customers want? Why do they want that? You will figure out the “how” as your company grows and responds to the changes around it.
If you develop a “how” mindset, you will focus on the wrong things. “Deliverables” are tasks completed, not necessarily improvement. Value, on the other hand changes, alters, and improves. For example, quality improvement initiatives might have made things more efficient, but how did the customer benefit? Companies who have won the much-coveted Malcolm Baldrige Award often find themselves in worse financial condition after receiving the award because they spent all their time and resources qualifying for the award instead of taking care of the customer.
What can you do to shift your mindset? Take prudent risks and proactively identify opportunities, because no company has cut its way to success. Move the focus from cutting cost to increasing profits. Identify what I call “the business prevention units” in your organization that slow things down in the name of making them better. Above all, re-educate your workforce and let them know there’s a new sheriff in town who cares about output, not input—profits, not revenues—results, not actions. Salespeople don’t make sales calls; they close business. Receptionists don’t just answer the phone; machines can do that. They immediately address customer needs and find the fastest solution.
Bentley doesn’t have an elevator “pitch” since they sell value, not transportation. What value do you offer that you fail to leverage and articulate? It starts with the mindset but has to travel quickly to the mouth. Remember the words of poet Dorothy Parker, first thing in the morning, brush your teeth and sharpen your tongue, otherwise you’re just teaching “a cannibal to use a fork.”
Dr. Linda Henman, the author of Landing in the Executive Chair, works with executives and boards in Fortune 500 Companies and small businesses that want to think strategically, grow dramatically, promote intelligently, and compete successfully today and tomorrow. She was one of eight succession planning experts who worked directly with John Tyson after his company’s acquisition of International Beef Products. Some of her other clients include Emerson Electric, Avon, Kraft Foods, Edward Jones, and Boeing. She can be reached in St. Louis at www.henmanperformancegroup.com.