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8 of 9 people found the following review helpful:
5.0 out of 5 stars
Impressive Conceptual Meta-Model Built on Best Practices, September 26, 2000
When the authors read The Discipline of Market Leaders, they must have immediately realized the potential of bringing the ideas of being an innovator, effective producer, and relationship manager together. This book fulfills that synthesis in a zero-time concept, of immediately providing value for stakeholders. In a December 1999 poll in Fast Company Magazine, 38 percent of respondents indicated that some aspect of their company already operated in a zero execution time mode. The book is built around five basic concepts for a targeted group of high profit margin customers: (1) Instant Value Alignment with customers (FedEx's commitment to on-time delivery and instant access to tracking information) (2) Instant Learning by employees and customers (Dell Computer's computer-based education at work cell assembly sites) (3) Instant Adaptation of the organization (G.E.'s focus on building a direction for the company around vision and trust) (4) Instant Execution of value for the customer (Progressive Insurance's accelerated claims processing methods) (5) Instant Involvement of all stakeholders (Cisco Systems' involvement with its suppliers and outsourcers from development through implementation for customers) A company can progress towards having all five elements in a three step process. First, you become a market leader by emphasizing either product/service innovation (employing instant learning and adaptation), operating excellence (using instant execution and involvement), or customer closeness (relationship building based on instant alignment and involvement). Second, you turn that into locking customers in by adding one more key element from the five part model. Third, you complete the transition into providing all five elements. A t-strategy is described for making this transition. You find an opportunity that is unfilled (such as the desire to be alone in the middle of other people that is partly served by the Sony Walkman), develop a key core competency for that conceptual space, and expand into some zero-time operations. You first apply that vision, core comptence, and distinctiveness for one market, then expand it into different, but similar (and usually related) markets. These market extensions form the vertical part of the 't' shape. For example, Dell Computer wants to employ direct selling with a competency of build-to-order to dominate the market for PCs by operational effectiveness. It expands from desk-top PCs to portable ones, then to servers, and now into storage. Now that you understand the model a bit, let me share a few quibbles. First, I disagree with the idea of focusing on a subset of customers who can provide the highest profit margin. I think a better concept is to identify the customers where they will give you the greatest combination of competitive insulation, profitability, and improvement in your economics of providing goods and services in order to be able to take on more customers profitably. Second, several stakeholders are missing from the discussion here such as shareholders, bondholders, the communities in which you operate, and those who regulate what you do. More thinking needs to be done about how to apply the model there stakeholders. Third, the authors argue that providing all three dimensions gives you a guaranteed customer for life. I disagree. You could still be upended by someone with a proprietary technology with the same zero-time elements that gives an edge in bringing more benefits to the customer. Another way of thinking about this is that technology can still be disruptive to this strategy (see The Innovator's Dilemma). Fourth, the authors do not address how to make the cost-benefit trade-off decisions. Getting closer to zero time gets more and more expensive. How much is it worth? How fast should you transition to this level of performance? The book will tend to encourage a too-fast transition, in my judgment. Fifth, when is a non-zero time response better? If someone asks me my opinion on an important subject, they may not want a response in 1 second. They may prefer that I pull together all of the resources of my organization for the next 3 days instead and provide a better answer. The book doesn't address that class of circumstances. Sixth, how do you correct for errors? I frequently stay in hotel chains that pride themselves on writing down my preferences. Then they smile broadly as they anticipate my needs and provide those preferences. The only problem is, that those aren't really my preferences. For example, staying at a luxury hotel with a sore throat, I ordered mid-afternoon tea with lemon. I don't usually drink it that way, but that's the way it always comes when I am at that hotel. In another luxury hotel, someone asked me casually if I liked the room I was staying in. I was feeling friendly and happy, and said, 'Oh, yes!' Well, for the next six years, I had the same room -- even though I actually preferred a different room. I respect what these hotels are trying to do so much that I don't have the heart to tell them they are unintentionally giving me the wrong service. Basically, like all models, it is a lot easier to understand than to do it well. After you have completed this fine book, put yourself in your stakeholders' shoes. What would you really want from your company? How would you like to go about making that happen? How would you like to adjust your needs and the responses you receive? Then use those insights to talk directly with your stakeholders about how well you are doing. If you are like most of the companies I study, you aren't ever delivering the right value. You'll need to get that straightened out before you start working on getting great value provided in zero time. Be effective!
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