A couple of weeks ago I sent a tweet with my epiphany on how strategy is like working in a fish store. I promised to blog about it and it has taken me a while to make it happen.
The one thing I have noticed about a fish store is the smell. Everything and everyone smells like FISH. Of course, this is not a big stretch of the imagination. Strategy is the same thing! When done correctly, an organization's strategy is pervasive and sticks to everything and everyone.
With that in mind, what makes a good strategy? Last time I mentioned that the rule book was written by Michael Porter (1975). The elements are (1) positioning, (2) trade-offs and, (3) fit. In terms of positioning, you identify who, what, where, when and how of the company. This is extremely important because in doing this you decide that your firm will not be everything to everyone (too many people try this approach and really satisfy no one and end up scrambling for business in the end - just look at the airline industry or the auto industry).
Once you realize that you cannot satisfy everyone, then you must make the choices that will define you. In doing so, you make trade-offs. In order to satisfy your strategy you will focus on some things and give up others. Many fish stores do not sell non-fish related goods (they are rarely butchers too). These trade-offs define you to your chosen products and market. You cannot satisfy both the high end customer and the value (cheap) consumer effectively. Often, those marketers will appear cheap to the higher end and continue to cheapen their brand. I often think of The Bay (a Canadian retailer). In order to compete they continuosly discounted their goods and began to look more like Zellers (a sister company). Their core customers moved on and it made the company even more reliant on sales and value customers.
Finally, the smelly part is FIT! Everything about the strategy must permeate the customer. No one expects Wal-Mart to pay much more than the minimum wage. Incredible, everything they do is about low cost (prices). Just like my fish store analogy where everyone smells like fish. Many companies, buy cheap goods and sell them as top quality. Others pay poorly and expect these underpaid people to sell high priced goods. These mismatches create discord and ruin the positive effect of strategy.
So, if you get it right then everyone and everything smells like fish. I hope I explained it well and that everyone will get on the strategy boat!
Saturday, November 6, 2010
Saturday, October 16, 2010
First Post: Motivations
A cousin of mine encouraged me to write a blog. She probably thought I would choose a different topic (running is a passion of mine) but I chose Customer Service. As a Supply Chain Management Professional (SCMP), I buy or conduct purchasing related activities all day (and all nigh and weekends as a consumer). I always make remarks about good & bad service and decided to put my ideas down on e-paper.
CUSTOMER SERVICE is a lost art. Over time it has waxed and waned. Some companies have it, others obviously do not. Even more, do not know what their customers want or expect which gives them many missed opportunities to WOW.
Customer Service is a result of an organization's strategy (If you want to learn more about that, please look up Michael Porter's What is Strategy from the Harvard Business Review). The firm must first identify who their customer is. It seems like an odd comment but I know people who work for non-profits and community based organizations and they have not had the courage to identify their customer. In those cases, they have multiple customers I have asked them what they sell/offer and they cannot find it either. I am sure they disappoint a lot.
As a buyer, I often discuss the end-user (my firm's customer or my customer's customer). They are not the customer. The manufacturer must satisfy them in terms of the product but not the service of delivering the product (nor worry about how good they are at paying). This is an important distinction, as I have a supplier that does not look at me as the customer. As such, by looking past me, he has never missed an opportunity to miss an opportunity. It became so difficult to do business with that firm that they lost 90% of their volume. It is disappointing considering how good their products are. The suppliers who look at me as the channel realize that my satisfaction will only benefit their business.
Selling to consumers is even tougher. As the expression in the restaurant business goes, "Your only as good as your last meal." Nevertheless, it is not necessarily easier to identify your customer. I walk into and browse in many stores that I would never buy from (cruel but true for everyone). Of course, the person sitting for a meal or at the cash register definitely is your customer. So, identify who he/she is so you can attract more of them.
In conclusion, we have to think about who the customer is as the first step to excellent customer service. Next time, I will try to expand on my thoughts of building a customer service oriented enterprise. I will also identify companies that have given me both great and horrible service to give soem examples. Any questions?
CUSTOMER SERVICE is a lost art. Over time it has waxed and waned. Some companies have it, others obviously do not. Even more, do not know what their customers want or expect which gives them many missed opportunities to WOW.
Customer Service is a result of an organization's strategy (If you want to learn more about that, please look up Michael Porter's What is Strategy from the Harvard Business Review). The firm must first identify who their customer is. It seems like an odd comment but I know people who work for non-profits and community based organizations and they have not had the courage to identify their customer. In those cases, they have multiple customers I have asked them what they sell/offer and they cannot find it either. I am sure they disappoint a lot.
As a buyer, I often discuss the end-user (my firm's customer or my customer's customer). They are not the customer. The manufacturer must satisfy them in terms of the product but not the service of delivering the product (nor worry about how good they are at paying). This is an important distinction, as I have a supplier that does not look at me as the customer. As such, by looking past me, he has never missed an opportunity to miss an opportunity. It became so difficult to do business with that firm that they lost 90% of their volume. It is disappointing considering how good their products are. The suppliers who look at me as the channel realize that my satisfaction will only benefit their business.
Selling to consumers is even tougher. As the expression in the restaurant business goes, "Your only as good as your last meal." Nevertheless, it is not necessarily easier to identify your customer. I walk into and browse in many stores that I would never buy from (cruel but true for everyone). Of course, the person sitting for a meal or at the cash register definitely is your customer. So, identify who he/she is so you can attract more of them.
In conclusion, we have to think about who the customer is as the first step to excellent customer service. Next time, I will try to expand on my thoughts of building a customer service oriented enterprise. I will also identify companies that have given me both great and horrible service to give soem examples. Any questions?
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