THE DISCIPLINE OF MARKET LEADERS

Lessons Learned From B&B Owners

Don Grayson, Ph D California School of Organizational Studies Alliant International University Society of Consulting Psychology Midwinter Conference February 12, 2005 dgrayson@alliant.edu

A Quaint Drinking Village With A Fishing Problem

Salty Dawg Saloon

B & B Business Intimate?

Clients Live under your roof Sleep in your bed (well, not YOUR bed) Eat meals you prepare at your table Spend time and money based upon your recommendations Look to you for help for (you name it)
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The Discipline of Market Leaders

Michael Treacy & Fred Wiersema

Operational Excellence

Product Leadership

Customer Intimacy
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Operational Excellence

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Operational Excellence (cont)

Goal for the Operationally Excellent organization
Efficient and effective processes Improved productivity Increased speed to market and competitive pricing

Customer gets:
Reliable products and services Ease of doing business with minimal inconvenience Low price

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Operational Excellence (cont.)

Likely Suspects - retail, manufacturing, energy distributors, and government services. Examples:

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Operational Excellence (cont.)

He insisted on meticulous cleanliness and constantly improving the operating system.
- McDonalds web site

Ray Kroc picks up trash outside a Munich McDonalds

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Product Leadership

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Product Leadership (cont.)

Goal for the Product Leader organization Identify, understand, and respond to current and future market needs Provide the best, most advanced and innovative product Customer gets: The best product, period
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Product Leadership (cont.)

Likely suspects - technology, R&D,
consumer goods, and media companies.

Examples:

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Product Leadership (cont.)

Our plan is to lead the public with new products rather than ask them what kinds of products they want. The public does not know what is possible, but we do.
Akio Morita (Sony)

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Product Leadership (cont.)

Our goal is to lead customers where they want to go before they know where they want to go.
- 3 M Executive

W. James McNerney, Jr. COB/CEO of 3M

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Customer Intimacy

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Customer Intimacy (cont.)

Goal for the Customer Intimate organization Understand the customer deeply Provide the best total solution Gain customer loyalty and a long term relationship Customer gets: Customized solutions Personalized service A trusted advisor
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Customer Intimacy (cont.)

Likely suspects service companies and professional service firms Examples:

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Customer Intimacy (cont.)

While Nordstrom was growing nationally, it focused on catering to customers' needs, individually.
- Nordstrom web site

John Nordstrom

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Critical Success Factors

1. Operational Excellence - Cost control 2. Product Leadership - Innovation 3. Customer Intimacy - Customer loyalty

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Organizational Cultures Bill Schneider

Control Collaboration Competence
Cultivation

Productivity Improvement Through Cultural Focus, Consulting Psychology Journal, December 1, 1995, Vol. 47 (1)
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Control Culture
We are well organized - structured, stable, orderly and predictable We are careful & methodical in our approach, objective and empirical in our analyses We avoid risk Fits Operational Excellence strategy
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Competence Culture
We like to achieve and compete We seek challenge and stretch goals. We strive to attain the impossible "Innovation and creativity are rewarded We hustle and show a sense of urgency Fits Product Leadership strategy
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Collaboration Culture
We are friendly and caring. Relationships and teamwork are important to us We are flexible and adaptable, responsive to internal and external customer needs The company is loyal to us and we are committed to it. We set our own needs aside for the good of all Fits Customer Intimacy strategy
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Market Strategies for Consulting Psychology

Operational Excellence Control Product Leadership Competence

Customer Intimacy Collaboration

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1. Know yourself and your competition (and be known by them)/Network

I Dont Do Pampering
- B & B owner

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Questions to Ponder
1. 2. 3.

Do I know what client activities I enjoy and other consultants enjoy? Do I know what kinds of clients I work well with and other consultants work well with? Do I mine my network?

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2. Discounts/Image of being a commodity

Let Me Find You Something Cheaper
- B & B owner

Inconsistent pricing undermines trust

- Elaine Biech The Business of Consulting

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Questions to Ponder
1.

2.

How do I respond to a request for a reduction in fees or other compromise of my service? How willing am I to stand up to the client? After all, the customer is not always right and Customer Intimacy does not mean doing everything the client wants.
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Audience Advisory!!!!!
The following slide may convey disturbing information to some viewers. Please be forewarned.

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3. Share Expectations - Train client to be Customer Intimate

This bathroom is filthy! - B & B guest

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In Kotzebue, nice means indoor plumbing

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Train client in Customer Intimacy

Avoid The attitude: the consultant can harm A closed, defensive mind Playing it safe Seeking answers from consultant Encourage The attitude: the consultant can help An open, receptive mind Taking a risk Collaborating with the consultant for solutions
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Questions to Ponder
1. 2. 3.

Do I ask clients of their experiences with consultants good, bad, and ugly? Do I tell clients what, in my experience, makes for a good and a bad client? Do we arrive at mutual expectations?

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4. Engage the total client

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Questions to Ponder
1.

2.

Do I treat each employee of the client as if they were a significant contact? Do I push outside my comfort zone of client contacts and do I resist the tendency to engage only those who appear aligned with my thinking?
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5. Start where client is & Be other-oriented

How exciting for you!!!
- B & B owner

Keep smiling in September

- B & B owner

She even answered her phone with a smile

- B & B guest

You werent solely interested in taking my money

- B & B guest
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Upon awakening and realizing that youre meeting w/ the shrink

2000 1800 1600 1400 1200 1000 800 600 400 200 0

I can't wait!

Let's wait and see

(Groan) Oh No!

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Questions to Ponder
1.

2.

Do I make sure that clients understand my role and the purpose of my meeting with them? Do I place client needs ahead of my own, particularly when there is conflict?

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6. Offer solutions, not answers Ask for clients help

Do we have a

problem ladies?
- B & B owner

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Answers vs. Solutions

I look for a relationship that serves as a pathway to discovery! I want to work with someone who can really listen to me first and foremost and then challenge me to think more and more deeply a trained set of ears.
- John C. J. Cronin, interviewed by Dick Diedrich (In the Eye of the CEO!, CPJ, March 1, 2004)
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Answers vs. Solutions

The good ones learn and engage us They need well-trained and well tuned ears Train them how to listen, to ask not how to tell Answers dont impress me it is the questions that are of value
- John C. J. Cronin, interviewed by Dick Diedrich (In the Eye of the CEO!, CPJ, March 1, 2004)
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Answers vs. Solutions

Answers Theoretical Absolute, from expert perspective Respond to explicit question One-way comm. Tell, tell, tell Solutions Practical/Applicable Relative, from client perspective Respond to implicit meaning Two-way comm. Ask, listen, ask
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Questions to Ponder
1.

2.

Do I feel pressured to have all the answers? Can I listen and reflect back what clients are saying and feeling, and can I ask probing questions that lead clients to their own solutions?

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7. Deliver on current and future assignment

Everything we do is readying.. for their next visit - B & B owner We came because of the property but well return because of the owner - B & B guest
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Questions to Ponder
1.

2.

3.

Am I alert to client needs that may fall outside of the current assignment? Do I push myself to deliver value on every assignment, regardless of who might notice? Am I seen as sincere & genuine?
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Conclusions
Customer Intimacy is our best strategy Collaboration is our best culture Consider these consulting strategies: Know yourself, know your competition 1. (and be known by them)/Network Avoid discounts/Image of being a 2. commodity Mutually share expectations - Train the 3. client to be Customer Intimate
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Conclusions (cont.)
4. 5. 6. Engage the total client Start where client is and Be other-oriented Offer solutions, not answers Ask for clients help 7. Deliver on current and future assignment Finally, visit Alaska, for there are many sights you will want to see.
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This is not one of them

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