When Special Isn’t So Special
In the eighties the world’s chemical giants got roughly the same idea at roughly the same time, shifting from commodity products to low-volume, specialty chemicals. The predictable result: Overcrowding and paper-thin margins. Special (as in specialty chemicals) turned out to be not so special after all.
Likewise, each of the major players in the computer industry, including IBM, is now promoting open-system (anyone’s product can be connected to anyone else’s) network-based, close-to-the-customer problem solving as their “special” vision.
And recent feature stories in Fortune and BusinessWeek described the implementation of identical strategies at Proctor & Gamble, United Technologies, and AT&T. Each is blasting out excessive layers of management, scrunching people together in multifunction teams (design, operations, finance, etc.), sidling up to the market to provide fast, specialized solutions to customers’ needs.
I should shed tears of joy. After all, this was the message that In Search of Excellence sprung on unsuspecting executives nearly 10 years ago. Now people are responding. All at the same time. All at the same speed. “Hey wait a minute,” as football commentator John Madden might say. Is there a problem here?
I’m not willing to recant those earlier ideas. But when all the flattening out, multifunction grouping, speeding up, and customer cuddling is complete, each company should worry about what will have made its approach unique. How will DuPont’s specialty chemicals binge be noticeably different from BASF’s and Monsanto’s? How will NCR’s open-systems, customized-solution approach be noticeably different from DEC’s and AT&T’s?.
There are no easy answers. On the one hand, speedy new processes are called for. Even in pharmaceuticals, let alone computers, semiconductors, software, or chemicals, it’s becoming next to impossible to maintain a proprietary edge for long; legal copycats with swift product development systems now cut the ground out from under most any leader’s “proprietary” position in a matter of months.
On the other hand, everyone’s mindless emulation of everyone else’s strategies is unlikely to get you far, either.
I’m surely not suggesting that a Monsanto, which has slashed its bulk-chemical business from about 70 percent of sales to just a couple of percent in the last 10 years, should revert to commodity production. Nor am I urging IBM to revert to the arm-twisting arrogance that accompanied its proprietary schemes in the past.
I am proposing (1) that special must indeed be SPECIAL and (2) that the big winners—companies like FedEx, Walmart, Turner Broadcasting, Apple—will continue to be those who change the rules and create brand new games, redefining whole industries in the process.
Special vs. SPECIAL. It is not enough (though it is certainly no mean feat) to trim new-product development cycles from three years to one year or less and install close-to-the-customer, multifunctional teams. Beyond that, you must be able to clearly articulate what it is about your process (for example, the way you listen to customers) that is the basis for a sustainable difference. The architects and engineers of CRS Sirrine of Houston, for instance, developed intensive client-listening protocols that are truly unique; moreover, CRS Sirrine refines its routine with each passing month. Only this sort of difference stands even a chance of staying the course.
Changing the rules. Companies that redefine their industries are invariably upstarts that benefited from the “I-didn’t-know-you-couldn’t-do-it-that-way” advantage, an advantage that seldom visits the established firm. In the rare instances when mature firms do rewrite the rules, it’s usually the result of granting astounding independence to business units and maintaining a high degree of disorganization.
My concern about trendy but predictable strategies jelled upon hearing a consultant applaud Apple’s time-based product development process (another new business buzz phrase); he says it allows the company to know exactly what products will be released through 1995. For Apple’s sake, I hope he’s wrong. Consider the birth of Macintosh computer: Company co-founder Steve Jobs got restless, stripped most of the stars from his “bet the business” Lisa computer project, carted them off to a little building, hoisted a pirate flag, and got down to work on the Mac. Make no mistake, the next PC/workstation/etc. breakthrough is likely to emerge in a similar, convoluted fashion. The question: Will it emerge from some cranny in IBM, Apple, Compaq, Hewlett-Packard, or Sun—or, at least as likely, from some outfit we haven’t heard of?
Perhaps my concern with copycat strategies is a premature alarm. You decide. In any case, as you turn to the imperative task of creating those speedy, close-to-the-customer, multifunction product-development teams, you’ll do yourself a big favor by asking, “How is my process going to be demonstrably different from that of all of my many competitors, sitting in similar conference rooms, attempting to do the same thing?”
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