I wonder sometimes why companies hire consultants. It seems that the first order would be to help them fix something in their business that is broken or seeking improvement. Folks that sit at the top of companies are smart, and I am pretty sure that most of the time they really do know what is broke and what needs fixed in their business, even when their actions indicate differently. The business is their baby. They do not need a consultant to tell them where the problems exist, although verification is always good. No, I think many times they seek the help of a consultant to make them feel better.
While that conclusion is certainly not always the case, what else explains the vast amounts of money that companies spend year-in and year-out on “improvements,” “education” and the next “new thing” only to keep doing things the way they always have? It is frustrating to work for a company, collect fees from them, get accolades all along the way, measure and track significant improvement, then two years later get fired and watch them revert to their old ways and habits in six months or less. Perhaps I am a bad consultant that gets fired a lot, which could be the case. However I watched this same movie over and over while in corporate America. Our company CEO, an extremely bright guy would hire and fire consultants every few years, we would all go through the drill almost like a cycle. In conversing about this very topic with my friend Jay Ehret this week from The Marketing Spot, a consultant himself, summed it up as “Companies are just being who they are.”
Watching so many businesses that could be so much more has me thinking about branding. It seems that many times the things that set great brands apart were always subtly there for anyone else to grab; it just took someone to “see” it differently, and then to actually implement and execute. Those uncontested waters contain great stories of profitable growth.
It is conventionally believed that companies can either create grater value to customers at a higher cost or create reasonable value at a lower cost. That said, many companies strategy is seen as making a choice between differentiation and low cost. But what happens when you achieve differentiation and lower cost simultaneously?
Value innovation is created when a companies action favorably affect both the cost structure and the value proposition. Eliminating and reducing the factors that an industry competes on create cost savings. It is in this space that uncontested markets are created, making the competition irrelevant.
Value innovation embraces a strategy that encompasses the entire system of a company’s activity. It requires companies to orient the whole system toward achieving an exponential leap in value for both the customer and the business. Align the whole system of your firm’s activities in pursuit of differentiation and low cost.
The companies that do it really well have made that exercise part of the fabric of their business, and have pushed past the fear, or whatever else was holding them back. It truly is much more fun to create the rules as opposed to following them. Is your business doing this? Mediocrity eventually erodes profits, and isn’t as safe of a space as you may think.