Several months ago i was asked to train a group of senior managers on new product development. They came from a large utility company and they have high expectations. Armed with my direct experience in product development and product/portfolio management; my client was happy.
It was tough to convince them that they already have all it takes to do “magic”. Yes the processes that i went through with them were helpful (Ideation, Innovation, Commercialization), but more than half of the problem is within their reach. The best part was they were very supportive and open minded. By the middle of the week they have already overcoming the boundaries.
What i try to relate is this article i read in recent HBR, April 2013. The title is Three Rules for Making A Company Truly Great. The research background; they studied 25,453 companies over 44 years and extracted these rules. Rules are meant to be followed and you must follow. 🙂 They are easy to understand:
RULE 1: Better Before Cheaper
RULE 2: Revenue Before Cost
RULE 3: There Are No Other Rules
I have always believe these 3 rules aeons ago and i am sure many of you as well. It is harder to implement though! (I had gone through the hardship as well). However, with these rules, you will observe; to reap the benefits take some time. But wouldnt you want to play for the long haul? Can you hang in there when your competitors throwing price? Can you innovate your products or services when your client demand sophisticated features? It is harder than you thought but certainly worthwhile.
Lets explore a little bit especially RULE 1 & RULE 2:
RULE 1: Better Than Cheaper
We must compete on other differentiators than price. Try excellent styling, durability, new functionality, exciting brand, reliability, easy payment, smooth customer service, convenience etc other than price. You can still lower your price but it has relative to value. If customers service is your product, make sure you get vendors that resonate with your differentiators. This helps you achieve performance goals than trying so hard to teach a fish how to fly.
RULE 2: Revenue Before Cost
We should focus and prioritize in increasing the revenue than reducing cost. Some say increase the size of the cake to get more. Dont just create value, it has to bring or turn into profits. Rarely cost leadership drives superior profitability. Therefore to increase revenue we need to create new customers and serve the existing ones well. Provide avenues to have consistent communication with them to build loyalty.
I highly recommend for you to check out this article. I’ll try to find the article online if its publicly available. Meanwhile i suggest you to adopt and follow these surprisingly simple rules to make a company truly great!
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