Excerpted from BusinessWeek, “Outperforming by ‘Outbehaving'”, by Dov Seidman, October 7, 2008
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Previously in business, finding advantage meant differentiating ourselves from the rest of the herd based on the products we produced, the supply chains we used to get our products to market quicker than the competition, and the service we provided to customers. If we outproduced, outsped, and outhustled rival companies, we also outsold them and “overpowered” the marketplace. This advantage was sustainable for longer periods of time in a less connected world, one in which it took competitors longer to catch up.
Today, we live in a hyperconnected world thanks to the explosion of communications technology in the late 20th century. Since hyper-connectivity breeds hyper-transparency, everyone can instantly see what we do and how we do it. As a result, everyone has grown much more interested in how we do what we do. This is especially true of our competitors, who can quickly see, study, and reverse-engineer our best-in-class supply-chain management processes, innovative product designs, and lightning-quick customer response times.
Hyperconnectivity and hypertransparency explain why so-called competitive advantage now lasts only weeks and months when it once endured for years and decades. We’re running out of areas in which we can stand out because previous forms of competitive differentiation are quickly becoming commodities.
What can’t be copied is how the company pursues these strategies.
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How a company approaches its decisions and how it executes them is as important as the decisions and actions themselves. It is defined by the extent to which it pursues its aspirations with authenticity, openness, consistency, and with fidelity to its values and principles.
The emergence of how—or behavior as a source of competitive differentiation is evident in the humanization business is experiencing.
On the marketing front, a growing number of companies assert that they are about much more than their products or services—that “much more” translates to people. For example, Johnson & Johnson (JNJ) asserts that “Tylenol is different because of the people who make it.” The product’s site contains video testimonials of workers responsible for the product, who make promises about the care and commitment they pour into their production and quality-assurance processes. Johnson & Johnson seeks to differentiate Tylenol from competing companies not only on the quality of its product, but more so based on the quality of its employees’ behaviors.
The entire “customer experience” movement reflects a similar desire, and it has been embraced by products and services companies alike. Business leaders have realized that customer service no longer suffices as a competitive differentiator, so they focus more time, energy, and investment in the human interaction their employees develop with customers.
Customer service is about how quickly an employee can connect with a customer. Customer experience is about the quality of that connection over time. Customer service is growing increasingly automated thanks to ATMs, interactive voice response (IVR) systems, and online self-service. Customer experience, which is designed to enhance the long-term loyalty of the most valuable customers, requires companies to outbehave their competitors.
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Adopting behavior as a governing principle of human endeavor and business can also be difficult because our previous habits of thought and action—all the outs (outmuscle, outfox, outscheme, etc.)—are deeply engrained.
These old habits of behavior allowed us to accumulate power over people through leverage. Our hyperconnectivity has greatly reduced the leverage we can exert over other people, however. In today’s flat and hyperconnected world, power increasingly is derived through people—through relationships, authenticity, transparency, and openness.
Edit by DAF
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Full article:
http://www.businessweek.com/managing/content/oct2008/ca2008107_857241.htm?chan=top+news_top+news+index+-+temp_managing
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