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Archives for January 9, 2012

The Bad Effects of "Smart" Compromises

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This is an important post from Seth Godin last week:

One of my favorite restaurants is a little Mexican place in Utah called El Chubasco. I’ve often eaten there twice in a day, and once (it’s true) ate there three times.

It’s always crowded. Sometimes people wait outside, in the cold, even though there are plenty of alternatives within walking distance. So, what’s the secret? Why is it worth a drive and a wait?

No specific reason. The energy of owners Jill and Craig is certainly part of it, but most customers never encounter them. I think it’s the hand-fitted gestalt of thousands of little decisions made by caring management out to make a difference. Usually, when a business like this gets bigger or turns into a chain, marketers make what feel like smart compromises. The MBAs collide with the mystical, and the place gets boring. “Why do we need 14 free salsas when we can get away with six?” or “Perhaps we ought to stop handing out huge tumblers of water for free–our bottled water sales will go up.”

This turns out to be the secret of just about every really successful enterprise. Sure, you can copy one or two or even three of their competitive advantages and unique remarkable attributes, but no, it’s going to be really difficult to recreate the magic of countless little decisions. The scarcity happens because so many businesses don’t care enough or are too scared to invest the energy in so many seemingly meaningless little bits of being extraordinary.

Here’s the main thing to focus on: much of the time, the things that appear to create more work or be less “economical” are what actually create the magic.

That’s why a cost-cutting focus, while having an appearance of wisdom, is actually deadly.

Tom Peters makes the same point in his landmark book In Search of Excellence. There is this notion to think that good business sense (and bringing good business sense to the world of ministry) means optimizing and creating efficiencies.

But that’s wrong. Good business sense is about making a great product or service — something people will love, rather than just put up with. Efficiency only becomes important after that, and as a result of it.

There might be a reason to have only six versions of salsa instead of 14. But that reason needs to be based in the fact that fewer options will somehow serve people better (Apple exemplifies this in many ways), rather than in the fact that it will be less work for you or “save money.”

 

The Primacy of Organizational Health

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Patrick Lencioni’s latest book is available for pre-order, and it looks fantastic: The Advantage: Why Organizational Health Trumps Everything Else In Business. I’ve found everything Lencioni has written to be incredibly enlightening and, best of all, wise. Lencioni writes from a foundation of virtue and character — which is what sets his books apart from so many others.

Here’s the short description of The Advantage:

In The Advantage, Patrick Lencioni argues that the seminal difference between successful companies and mediocre ones has little to do with what they know and how smart they are, and more to do with how healthy they are.

And here’s the longer description from Amazon:

There is a competitive advantage out there, arguably more powerful than any other. Is it superior strategy? Faster innovation? Smarter employees? No, New York Times best-selling author, Patrick Lencioni, argues that the seminal difference between successful companies and mediocre ones has little to do with what they know and how smart they are and more to do with how healthy they are. In this book, Lencioni brings together his vast experience and many of the themes cultivated in his other best-selling books and delivers a first: a cohesive and comprehensive exploration of the unique advantage organizational health provides.

Simply put, an organization is healthy when it is whole, consistent and complete, when its management, operations and culture are unified.  Healthy organizations outperform their counterparts, are free of politics and confusion and provide an environment where star performers never want to leave. Lencioni’s first non-fiction book provides leaders with a groundbreaking, approachable model for achieving organizational health—complete with stories, tips and anecdotes from his experiences consulting to some of the nation’s leading organizations. In this age of informational ubiquity and nano-second change, it is no longer enough to build a competitive advantage based on intelligence alone. The Advantage provides a foundational construct for conducting business in a new way—one that maximizes human potential and aligns the organization around a common set of principles.