Competitive Strength = FREE - What's It Like?

In our Blog posts, we write about the various levels of comparative Competitive Strength  - we regularly refer to Constrained, Comfortable, Excellent – and only every now and again do we find the opportunity to refer to Free, the highest level.  Why is this?  Because it is rare and precious – the businesses that operate at the Free level are the organisations that are outperforming the average by at least 50% on all financial measures.

So what is it like to be Free?  For a start it is not a list of things that the organisation does – it is not policies, methodologies, procedures, systems, assets, training programmes – although all of these may be outcomes of their essential difference.  That essential difference is that they Think Different – they have a different way of mind – they have a different way of being – they have a different way of working - they are on another planet – the planet Beyond Excellence.

A wonderful coincidence -  I have just joined Skype because it comes with the “3” mobile that is replacing my “Orange” phone (12+ years of customer loyalty lost as they have slid from Excellent down through Comfortable to Constrained, time to get out).  And, whilst finding out about Skype, I found this address by their Chief Executive to his team – extracts only

Home Improvement - Josh Silverman on November 20, 2008

"Skype remains a work in progress. We’re a dynamic, fast-growing company that learns from a changing world and adjusts accordingly. For us to continue thriving, change cannot be a one-time thing. It has to be a way of life. Stagnation, the dismal alternative, requires no effort and creeps up silently. People tend to get stuck in their ways and companies are no different. When they get bigger, they get clumsier.

I’d rather avoid that last bit. So, in August we began evaluating our structure to make sure, really sure, that we don’t join the Clumsy Club.

Now, 2008 has been a very good year for us. Our growth rate has been terrific and I’m cautiously optimistic about healthy growth in 2009 as well. Obviously, anyone claiming to have a reliable crystal ball is either a fool or a gambler. We’re neither. But in difficult times, people tend to turn to value. And Skype represents value. We’re monitoring the market closely, but based on what we see at the moment, we plan to continue growing our team to help achieve Skype’s full potential.

Excited as we are about bringing new colleagues aboard, there’s more to reorganizing our structure for continued growth. Back in the summer, we set out to be smart about it. And transparent. And fair.

Which is why we held numerous workshops to gain input from the team on how our structure and ways of working need to change. Change that we hope will lead to sustained growth, better products and an even more empowering work life at Skype. One of the things we’re doing is to create smaller “companies” within the company: consumer-, business-, mobility-, and developer-focused business units vaccinated against shackles that curb innovation and risk-taking. Each new business unit is designed to emulate the feel of a start-up and to cultivate a deeper sense of ownership.  

This is just a low-resolution snapshot from what’s a continual journey of change. There’s much more to it, of course. Replotting our roles, responsibilities and accountability takes time. While we think that we’ve done most things right, some won’t come through as intended. Tweaking them for a few months should make life at Skype work well for everybody.

Naturally, changes will be most meaningful to us on the inside. If you’re a Skype user, I hope you don’t care too much about our organizational plumbing. The pleasures and struggles of your own life are much too important for that. But here’s the thing. Our structural rethink isn’t about change for change’s sake. From day one, everything at Skype has boiled down to delighting the customer.

With a bit of home improvement to support further growth and innovation, we’re just making sure it stays that way.

Skype will always be a work in progress."

I have highlighted the interesting key indicators in bold

If you can see how different this is, and you are intrigued, there may be hope for you and your business. 

If you think that they are just riding the wave of novelty and have yet to “grow up” – (e.g. if “they don’t know they are born” flashes across your mind) - you and your business are probably doomed.

Josh Silverman knows that

If you always do what you always did, you will only get what you always got

He is demonstrating a deep understanding of Changeability and a serious commitment to making sure that it remains high in his ever expanding empire.  He is actively seeking to continue to Transform Performance and, in setting the path for further expansion in troubled times, exhibiting his confidence in the comparative Competitive Strength of the business.  He has understood the importance of agility and flexibility – he realises that his fleet of gun boats has the potential to run rings around the clumsy battleships of traditional telecoms companies.

The Competitive Strength Report Process is the only tool available from anyone, anywhere that provides an objective measure of Competitive Strength compared to the very best in the world. It is based on extensive and rock solid research into what it takes to create and sustain an organisation that can exceed expectations in every respect. 

The Competitive Strength Report enables a company leadership to understand where they are positioned, in comparison to the very best, where their main threats lie, what the implications are and helps them decide very clearly,  collectively and speedily  what they need to do. There is nothing else as fast, as accessible or as affordable

Find out more about it on our Competitive Strength web site page – or at the Competitive Strength Report web  site.

Why am I feeling Good today?

Yesterday was bad news for a good person.  Today, my attention was drawn to the other side of the coin, some good news.

There are a tiny minority of companies with the highest level of comparative Competitive Strength - the condition we call Free.   One of these is AEASEAL in Rotherham.

Here is an extract from one of their web site news pages

How does the Exceptional Customer Service Industry Leader, Stay Ahead?

The answer is simple: They invest in Technology, People and Processes.

There are few 9-axis machine tools running in the UK today, even fewer tasked with making small batches (1 to 3 off) in an ultra fast-response environment. AESSEAL® has now bought 9-axis machining centres for their dedicated Hydrocarbon Processing Manufacturing cells. The vision is simple; to provide exceptional customer service for unique and custom made Oil and Gas mechanical seals.

AESSEAL® is the industry leader at providing exceptional customer service for the mechanical seal industry. The business delivers 62% of ALL its products within 24 hours and 72% within 72 hours…. pretty impressive when you have 66 sites located in over 30 countries.

Exceptional customer service values run through the organisation’s veins. Service enhancement developments are second nature. This is true even for complex, low volume, custom made non-standard designs as found in the Oil and Gas Industry.

If you were to consider making a one-off engineered component on a highly complex and expensive multi-axis machine tool, some may well question your sanity.

However, given the fact most mechanical seals found in the Oil and Gas industry are hard piped, the last thing the customer wants is the expense of changing this when the seal needs changing. Therefore, practically every gland plate is custom made to suit the application making it impossible to put advanced inventory in place.

When you can’t put an item in inventory, you create a process and invest in technology that eliminates the need for inventory. 

By making parts in a fraction of the time that it would typically take using conventional methods, eliminating the need to set-up the machine tool at the same time, the vision of delivering exceptional service on non-standard products becomes a reality.

In a unique initiative, AESSEAL plc is creating machining cells in which the machines themselves and the supporting infrastructure replace the need for inventory. Complex geometrical components will be made so quickly that customers will receive seals as if they had been already produced and available “off the shelf”.

The highlighting colours and bold emphases are mine, not AEASEAL's

This is Different Thinking and is delivering Different Results.  

AEASEAL is a UK Manufacturing company that has maintained unbroken growth  since its foundation in 1983.  Their total focus is, and has been from Day 1, on Customer Service.  Please go to their web site and read all about them(there is a link at the bottom of this page) .  

You too could follow this path - if you have the courage, the determination, the sustained inventiveness and develop the disciplines, the attitudes, the values and the competence they have.  If you develop the Different Thinking that they, and all the others that are at this level of Competitive Strength, have learned to do.  We have spent 15 years developing tools and techniques to help you to help yourself to make this transition, better, faster, cheaper.

Why do I feel good about this?  In 1982 I went to work for McDonnell Douglas Automation Company to sell their new CAD/CAM technology here in the UK.  Way back then, I saw an extremely complex and urgently needed ( 4 days to launch) Space Shuttle component being machined whilst the design was still being completed - the Design to Manufacturing lead time was 30 minutes!  I learned at that moment that nothing was impossible.

Over the next 6 years our small McAuto UK team helped British manufacturing pioneers to introduce this new technology to transform their businesses - mould and tool makers, aerospace component makers, telephone companies, machinery makers, and JCB.  Others followed.  We were encouraging a revolutionary manufacturing strategy, the ideal goal of maximum flexibility and adaptabilty in manufacturing capacity - the shorthand was "Economic Batch Quantity equals One". ("EBQ=1" - does anybody remember that buzzword?).

Now, 26 years later, this is a perfect demonstration of the achievement of that goal - and for a business differentiating purpose - outstanding Customer Service.

You can find out more about the new concept of comparative Competitive Strength on our web site page.   You can learn more about Different  Thinking for Different Results on our insert page.

And you can learn more about AEASEAL, a beacon of Excellence - here.

Why I Feel Bad Today

Today I learned that a prophecy I had made to someone nice had come true, for  them.  And it is not good news.

Last week I phoned VirginMedia to tell them that they were trying mistakenly to extract payment for my cancelled account.  I had to quit VirginMedia Broadband because they totally failed to perform, and repeatedly misled me. My ChangeWORLD business partner, also a long time Virgin customer,  had to quit after a total and lengthy failure of service.  He was told by Offcom (it was that bad) that they were in breach of contract.

My call was answered by someone who insisted that there was a penalty charge - when I questioned this and asked to speak to a supervisor I was disconnected - that is what we have come to expect from VirginMedia.  My second call was answered by someone totally different. This lady checked the facts, apologised nicely for an administrative error, and acted at once to cancel their end of the Direct Debit arrangement.  I was so pleased to be treated with courtesy and respect.

So pleased that, as I said goodbye, I suggested to the lady that she should start as quickly as possible to find a new job.   I explained that I was one of the authors of a business health measurement tool and that it was indicating that VirginMedia was going downhill, fast.  I told her that I was very sorry, after all the good years I had enjoyed with VirginNet, at the certainty that many jobs would be lost - possibly hers too.

We predicted this via the Competitive Strength point of view elsewhere in this Blog series.

Today's news is that VirginMedia will shed 2,000 jobs.

There are times when it is horrible to be proved right.

Get Your Life Rafts Ready - NOW

Different Thinking for Different Results is our constant theme.  It is the essence of  Changeability, the key to survival in these turbulent economic conditions.

We are so grateful when it is vividly highlighted as in the excerpts below: -

From The Times  November 12, 2008 - David Wighton: Business editor's commentary

Gordon Brown should take note of Vodafone's strategy for the recession as the telecoms giant battens down the hatches

Vittorio Colao and Gordon Brown are adopting rather different strategies for piloting their vessels through the economic storm. At the good ship Vodafone, Mr Colao is battening down the hatches and reefing the sails.

At HMS UK, Mr Brown has thrown away the charts and is going full steam ahead.

The market reaction has also been different. Mr Colao's promise to cut costs, focus on cash and forget about acquisitions was rewarded with a 6 per cent jump in the share price yesterday.

Mr Brown's promise to cut taxes, focus on spending and forget about government borrowing saw sterling sink to a new 12-year low.

Mr Colao's call for the company to make better use of what it already has rather than chasing new markets looks eminently sensible.

After years of fast growth and acquisitions, there should also be plenty of efficiencies to be squeezed out. The aim to build a leaner and more nimble organisation plays to the strengths of Mr Colao, a fanatical competitive cyclist.

And there was clear evidence of the new cost regime yesterday. Rather than the lavish spread previously provided at press conferences, journalists had to make do with a few stale buns left from the analysts' presentation.

The new focus on “giving customers what they want” is a bit of an indictment of what it was doing before.

But it also reflects the reality that in rapidly deteriorating conditions businesses need to be very sensitive to the changing needs of customers and tailor products and pricing accordingly.

Vodafone’s leadership is demonstrating Different Thinking – and because it looks likely to contain downside risks in the current economic turmoil – it will deliver Different Results.  This behaviour is  characteristic of an organisation with the level of comparative Competitive Strength that we call Excellent.  This is the flexibility, adaptability and readiness to ask itself the tough questions that takes such companies into leading their marketplace, rather than playing catch-up.

These are courageous decisions for an organisation that, like its peers in the mobile communications marketplace, has been hell bent on growth, customer head count, volumes and headline revenues and fuelled by truly cosmic levels of leveraged debt.  Swinging the internal culture into a focus on operational excellence, on outstanding competence, on extraordinary effectiveness in all matters, is going to be a big challenge. 

Never is this more true than when a business culture has been Sales led. We have seen this demonstrated massively, and disastrously for us all, by so many of the Banking sector.  This is where our assessment last year of their comparative Competitive Strength condition as Comfortable turned out to be far too true – so Comfortable that within a few weeks of a changed environment they found themselves flailing about in the Constrained condition – and we found ourselves , with them, peering into The Abyss.

Mr Colau is too smart to let this happen.  But, he will have to get his battleship sized organisation to move rapidly and convincingly into the new way of acting that he has identified.  And that will require a New Way of Thinking.  That can be done but has not been easy, as other large corporations have found. We wish him well, and will watch with interest.

On the other hand, Mr Brown is not too smart, as we all know.  He is going to keep on doing what he has always done – and we are going to keep on getting what we have always got.  God Help Us All. 

There is no organisation that is more totally “Sales” led than this Government.  There has been such a consistent pattern of the same behaviours repeated over and over again, the delusion that giving something a different name actually causes it to change, that shuffling data to show different results means that change has been achieved, the constant changing of organisational structures for “Sales” purposes – I better stop here, my frustration is all so non-productive – as is its subject.  This is, in our terms, more like what we would describe in a corporate comparison as a  Constrained condition – but down at the lowest level of that, next to what we call, in a deeply technical phrase “Basket Case”.  Beyond the sort of remedial transformation that businesses might be able to achieve.

So, we are all in the same boat.  And, as the article suggests, we are sailing at full speed into the ice fields with our Mad Captain on the bridge  - with his charts torn up, his radar switched off and listening to none.  Moving the deckchairs is not going to make any difference.  Like Mr Colau, we all need to apply Different Thinking to make sure that we too get Different Results, that we too are as prepared as we can be for the nasty surprises that lie ahead, that we too are focused on What Matters and not on what we might have been up to now. We must all have our life rafts ready and survival kits prepared.  It is time for Different Thinking.

We developed our Competitive Strength Report to help business leaderships start their Different Thinking better, faster and cheaper, than any other tool before.  The Competitive Strength Report Process is the only tool available from anyone, anywhere that provides an objective measure of Competitive Strength compared to the very best in the world. It is based on extensive and rock solid research into what it takes to create and sustain an organisation that can exceed expectations in every respect - the demonstrated doorway to increased resilience and survivability. 

The Competitive Strength Report enables a company leadership to understand where they are positioned, in comparison to the very best, where their main threats lie, what the implications are and helps them decide very clearly,  collectively and speedily  what they need to do.

If you would like to know more about this, or ask us any questions, please have a look at our Competitive Strength web page with video - and our Different Thinking web page