Thursday, 8 November 2007

Long-term success still requires differentation

from Hayes, R., Pisano, G., Upton, D. & Wheelwright, S. (2005) Operations, Strategy and Technology: Pursuing the Competitive Edge. John Wiley & Sons

Criticizing "New Approaches to Operations" (NAO); the "re-engineering" frenzy and all that

p. 14: (Contrast this to Blue Ocean Strategy's Strategy Canvas!)

Striving simply to be "lean", or even "world class" is insufficient and, in fact, somewhat simplistic. At best, you end up only as good as (that is, no better than) your toughest competitors, and find yourself continually playing catch-up with them. ...long-term success still requires that a company differentiates itself from its competitors by offering something unique and valuable to customers - whether this be especially quick service, high reliability, low costs, or innovative products.

The whole point of Sun Tzu and Boyd was that the best way to win is avoid playing by your opponent's rules. If a competitor is really, really good at something, the odds are you're not going to be that good even if you tried. No one, not even fellow Japanese car manufacturers, has managed to copy Toyota Production System; trying to out-Toyota Toyota is foolishness.

Maybe this is because those last bits of excellence that distinguish the champions from the also-rans come only with a combination of circumstances AND hard practice. Achieving that last 20% (or 5%) of capability improvement might very well take as long as reaching from zero to 80% (or 95%); and in this age of MBAs and bean-counters, is it likely that someone whips out an Excel sheet, showing that spending another 10 M € is not worth the improvement? (And he's probably right, too.)

By the way, this is at the bottom of what I think makes Apple so formidable: I've gained the impression that when mr. Jobs wants something to be done 100% - say, the iPhone user interface - it is done 100%, not until cost/benefit analysis shows that customers don't really pay that much more for "extra few percentages" in usability.

The other companies stay at 80% level, at the O.K. level, and move on to the next project - but it's not the same thing as taking a photographer's loupe to every tiny little detail (see Time article on iPhone).

That's 100%. And that's why it's not smart trying to out-Apple Apple.

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