Entrepreneur
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By Andrew Neitlich

How Do You Compete?

By Andrew Neitlich
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First, thanks to those who responded to the last blog about your stickiest situations. Give me a day or two to sort out your responses and choose a winner for the free manual.

My vacation was fantastic — a cruise on the Celebrity Century. We were skeptical about going on a huge cruise ship, and were blown away by the amazing service we received. This got me thinking about strategy. To be blunt….

How do you compete?

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One of the most elegant strategic frameworks out there is by Michael Treacy and his book, “The Discipline of Market Leaders.” Unfortunately, the book took some heat when his consulting firm allegedly bought tens of thousands of copies to push it onto the best-seller lists. But the content itself is still worthwhile. Read on….

Basically, his framework states that companies who dominate their industries do so by spiking in one of three domains: product leadership, customer intimacy, or operational excellence. Companies that try to excel in all three fall into the “zone of mediocrity” while ALL companies still have to meet minimum standards in the remaining two areas. So you have to choose one discipline where you will excel, and then keep up with the market in the other two disciplines.

Product leadership means you come up with cutting edge products for customers who value first movers and the leading edge. Intel is a great example, as is Nike.

Customer intimacy means you develop lasting relationships with your clients, and expand your offerings to meet a wide range of their needs. They become trusted advisors. IBM is an example of this type of company. They might not have the BEST products across the board, but are fantastic at understanding client’s needs and providing a broad range of solutions to their problems.

Operational excellence means that you provide no-frills, fast, low-cost value to your customers. Southwest Air and WalMart are classic examples here.

I’ve intentionally not applied this framework to Web Designers/Developers. Take some time and think about how the following four questions apply to you:

1. Which of the above three disciplines best defines your strategy?

2. In which of the above three disciplines do you not meet minimum market standards?

3. Are you at risk of falling into what the book calls “the zone of mediocrity”?

4. If you had to apply this framework, which discipline would you choose, and what would you do differently starting tomorrow?

Best,

Andrew

P.S. The Celebrity cruise line, I think, is an example of customer intimacy. Their fleet is older than the “product leaders,” but they have found numerous ways to keep customers coming back again and again with extraordinary service. But they have to upgrade their fleet over time or they risk falling below market expectations in the product leadership discipline.

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