- Strive for higher quality products. Quality has always been a competitive advantage but in today's market it is possible to imitate everything from smart phones to cars within a matter months. Patents and complex manufacturing materials do not provide the shelter they once used to and therefore quality is truly elevated to being the defining feature of a market leader.
- Part of providing higher quality products is to offer a portfolio of services or products within a single product. An even better way to think of this is as a platform with add-on capabilities. Just like a computer operating system is a platform for building software applications on, a business can be a platform for building on top of. IBM was able to successfully implement this strategy by divesting its single-serving commodity products and then launch their Smarter Planet technology. They have created a platform for large entities such as cities and corporations to monitor resource usage with no end to the number of nodes that can be built on top of it. And, by purchasing PWC's consulting practice they are also able to manage implementation, maintenance, and innovation.
- Offering many services within a single product allows a business to enhance customer experience through frequent touch points. Today's mobile apps and games are fantastic examples of platforms that offer new maps, new abilities and features, and other add-on capabilities for the user. However, this also has the effect of providing an interaction between the vendor and the customer. Interactions are important for many reasons such as making the company more relatable and "human" to customers, remaining at the front of a customer's mind through weekly or daily interactions instead of annually (or some larger interval) during product launches, and listening to what customers are saying[1] which in turn leads to faster product innovation, quicker responses to crises, repeat business, and a more comprehensive profile of individual customers. Establishing a direct connection to customer is essential.
- Maintaining this level of customer service while growing an ecosystem of products is impossible if internal policies are too tight or if internal information flow is hindered. A business that successfully implements the above strategy is one that isn't afraid to experiment. Google is often recognized as a leader in product experimentation with their large R&D budget, 20% time for employees, and investments in everything from solar energy to self driving cars. Yet they stand out as a company that isn't afraid to launch an idea, sometimes only half baked, see where it goes and quickly kill or reinforce it. The important part of getting this right is creating spaces for creative workers to experiment, having leaders that know how to provide just enough structure to channel that creativity, and then a system for harvesting and promoting the best ideas. As they say in the start-up world, fail fast and fail forward.
- Finally, re-think the pricing models of the past. Today's online businesses have proven that freemium models can and do work, Amazon is proving that selling the hardware below production costs will payoff when customer's purchase everything that feeds into it, and newspapers are slowly working through the mechanics of digital distribution. There is little that still works in this world "because it's always been done that way".
[1] http://www.mckinseyquarterly.com/Competing_through_data_Three_experts_offer_their_game_plans_2868?pagenum=1#interactive - Eric Brynjolfsson, 4 minutes and 42 seconds in.
No comments:
Post a Comment