Customer Intimacy as a company value point

Can focusing on one area of operational excellence make the difference?

Management theory gurus Michael E. Porter, Michael Treacy and Fred Wiersema believed that successful companies all have something in common. What do they do differently from the others? Why are some more successful than the others? Is there a learning experience for all of us to be captured?

We can and should try to learn as much as we can from the successes of the best. Companies that lead in their field identify their targets and objectives, set milestones with clear and measurable outcomes and most of all they maintain their focus on achieving these goals. However, this is not enough. Successful companies also have to focus on the specific things that provide a competitive advantage. So how do we know what to focus on?

Some keywords on operational models

Treacy and Wiersema summarized the characteristics of three major operational models. Truly outstanding companies focus exclusively on one operational model at a time. That’s because focusing on more than one simultaneously creates distractions and often results in diluted efforts – and results — in all three. This does not mean that a company should to forget any of the three. On the contrary; companies still need to execute the two “subsidiary” operational models equally well or preferably better than the competition, but the main differentiator will be the selected primary model. This selected model becomes ´The Principal Signpost´ or “One Company Way” guiding all of the company’s programs and actions. To accomplish this it needs to drive and be clearly incorporated into company strategy.

The three operational models and their characteristics – which is your value point?

Product Leadership

R&D focus
Technology innovator
High risk
High margin
High investment

Operational Excellence

Streamlined process focus
Standardized products and offering
“Multiply the formula”
Cost leader
Low price