The one-year-old recovery is weak and uneven. It faces headwinds of fear, deficits, terror threats, entitlement bombs, higher taxes and moral hazards, as well as armies of hair-trigger traders with their eyes on a black swan. Have we left anything out?
Oh, yes. Some companies managed to do well despite it all. Somebody forgot to tell Apple about the bad weather--same holds true for Domino's Pizza, Trek Bicycle, Scottrade, Salesforce.com, NetApp, Monsanto. Across a range of industries some companies are chugging ahead.
What do the winners have in common? They excel at most or all of the following corporate skill sets.
Design. The data deluge has arrived, courtesy of billions of Web pages and millions of marketing channels zapping us like bolts of lightning from clouds of bandwidth. There is no elevator, no airplane seat, no bar, no loo that is safe from the barrage. Between our ears there has been no improvement in processing and analyzing. Maybe nanotech will make every man a genius, but that's a generation or two away. Meantime, products must stick out to get noticed and be loved fanatically by users to get real momentum. Great design will prevail, whether it's an iPad, a Flip cam, a room at the W, a seat on Virgin or a bottle of Coke.
Speed. The pressing fact of business today is compressed margins. If you can't win on cost, then you must find other routes to margin. Good design is margin. So is speed. Last winter I broke my hip cycling and, fearing the loss of all my fitness, purchased a $4,000 spin trainer. That's what athletes do when they're desperate. But the spin trainer kept missing the ship. Meanwhile, my hip healed. One day I woke up and said: "Did I just pay $4,000 for an indoor bike?" I didn't need it anymore, so I canceled the order.
Blow the opportunity window and you blow the margin.
Cost. Maybe you can't beat a Chinese company on cost, but you can do much to bring your costs down. "Software as a service" from Salesforce.com, SAP and others gives you enterprise analytics at PC prices. Google may be known for its search engine and advertising model, but its cheap trick is harnessing millions of commodity servers to do the work.
Service. Customer-pleasing service can work at all points along the cost spectrum. Think Four Seasons at the top, Disneyland in the middle, Southwest Airlines at the bottom. The trick is being true to your brand and never promising service you can't deliver.
Take Southwest. How can this airline make you print out your own boarding pass, stand in line and scramble for available seats, and still have you feeling good about the whole deal? For one, that's how Southwest sets your expectations. Two, Southwest's attendants are given free rein to laugh and entertain you. The message is: We're all in this crowded aluminum tube together, so let's relax and have fun. Three, Southwest delivers where it counts: a good record of on-time arrival.
Communication outside. In a loud, overcrowded market with proliferating technologies and channels of communication that include everything from Forbes to Facebook to TV to Twitter, where do you even start? How do you allocate your ad dollars, your public relations? Which bases do you cover when you can't cover them all?
Start by asking these clarifying questions: What are the values of your company? How do customers participate in those values? You might end up doing things you hadn't thought of. Jon Iwata, chief marketing officer of IBM, regularly communicates to ex-IBM employees. Why? Because there are hundreds of thousands of them, and most of them will talk about IBM--for good or bad--on social networks like Facebook.
Communication inside. The first thing Johan Bruyneel did when he became Lance Armstrong's bicycle team director in 1998 was equip the whole team with radios and earpieces. That was once a star's perk, but Bruyneel knew that the Tour de France was a three-week expedition in which the mental errors of the entire team were cumulative. It was a difficult technical feat to fit every cyclist into the two-way radio loop, but Bruyneel pulled it off. As a team director he has eight wins and one third place in the Tour de France.
Purpose. In 2004 I was fortunate to hold one of the last recorded interviews with Peter Drucker, about 13 months before the great man's death. Drucker spent the last part of his career studying nonprofits--hospitals, museums, churches and the like. He felt they are as critical to a society's success as good government, entrepreneurs and thriving corporations. Drucker said one word separated enduring nonprofits from those that lapsed into bureaucratic stagnation or scandal: Purpose!
Entrepreneur and author Simon Sinek has discovered the same thing. All companies know what they do, says Sinek. They sell something, at a profit, they hope. The better companies know how to codify all the procedures and good habits that make success routine. The very best companies know why they do what they do. They have a purpose--a reason for existence that transcends profit. Driven by purpose, they create a movement and consequently get the most discerning and loyal customers. In today's crowded global marketplace customers "don't buy what you do," says Sinek. "They buy why you do it."
In this uneven recovery, with trust in tatters and fear off the charts, purpose has never mattered more.
