How to Win the Competitive AdvantageJune 25, 2012 | By Wayne O'Neill
On a daily basis in my neighborhood, a steady stream of cars back up traffic into the street to get into Chick-fil-A. Though there are many other fast food choices with no waiting lines all around, Chick-fil-A is the only quick service restaurant with a waiting line every day of the week, except Sunday when they are closed. In the fast food market, in terms of profit, customer loyalty, and employee satisfaction Chick-fil-A is off the charts. Yes, they have really good food, but many competitors do too. What sets them apart? What gives them the competitive advantage?
President of Chick-fil-A, Dan Cathy, speaks often to his employees about values, faith, and serving others. Dan says their competitive edge is “going the extra mile.” They are a smart company and their competitive advantage comes in the health of their organization. Their core purposes and values can be summarized in their healthy relationships built through high employee morale, award-winning customer service, and community involvement. The successful growth of the franchise has been attributed to employee loyalty, employee satisfaction and extremely low turnover (less than 5% a year.*) Profits increase when there is less turnover. You can tap into more of your organization’s intelligence by developing the health of your organization.
But, what if you are not in the food industry, how does this apply? Every organization tries to be as smart as possible in terms of strategy, marketing, finance and technology. You want to create different value propositions and distinguish yourself from your competitors. Ultimately, you want to draw a parallel to the business differentiators and how your organization can use them to gain the competitive advantage.
The challenge today is that it is hard to be smarter than the next organization. Even if you establish an advantage in strategy, marketing, finance or technology, competitors can duplicate it quickly. Information and ideas spread so quickly today that you need more to maintain a competitive advantage.
According to successful businessman, leading consultant, and best-selling author, Patrick Lencioni, in his newest book, The Advantage: Why Organizational Health Trumps Everything Else in Business, many have knowledge and understanding of strategy, marketing, finance and technology, but not enough health within the organization to use that knowledge to gain a competitive advantage.
What are the benefits of developing a healthy organization?
- Minimal Politics
- Minimal Confusion
- High Morale
- Low Turnover
- High Productivity
When an organization minimizes infighting and dysfunctionality within its own walls and becomes healthy, it finds a way to tap into so much more of its intelligence that it runs circles around its competition. A good example of this is Southwest Airlines.
In a difficult industry during the worst times, Southwest Airlines never laid off employees and continues to make money when other airlines were looking for the government to bail them out. Southwest Airlines continues to attract the brightest and the best employees. Employees do not leave and customers are extremely loyal to them. Why? What do they do differently than all the rest? Southwest Airlines has plenty of intelligence, but they do not necessarily have smarter executives who have more degrees than their competition. Employees are not necessarily paid more, The key is that they have built a healthy organization that together have figured out how to run a better airline. That leads to happier employees, happier customers and greater performance.
What do you have to do to develop a healthy organization?
Four Disciplines that Healthy Organizations Master
1. Build and Maintain a Cohesive Leadership Team – Become behaviorally aligned.
Get leaders to behave in a functional, cohesive way. The measure of a great team is that the leaders behave in a way that trust is present so the team can engage in constructive conflict, so they will commit to group decisions and hold one another accountable to those decisions and they can accomplish results. (For more details, read the WOA blog: Building a Cohesive, Productive Team) As we coach organizations to health, we also address the business and political issues and guide leadership in forming a cohesive team that is ready to take action steps to achieving long-term, sustainable success with a competitive advantage.
2. Create Clarity– Ensure intellectual alignment of members of your leadership team around six critical questions:
- Why do we exist?… beyond making money? What is your core purpose?
- How do we behave? What are your core behaviors / core values?
- What do we do? What do we actually do for a living? Are you a product or service company?
- How will we succeed? What are the key intentional, purposeful decisions that your organization is going to make to differentiate itself from its competitors and give itself the best chance to succeed in the market?
- What is most important, right now? What is the most pressing goal that everyone needs to rally around? What are the defining objectives? What are your standard five or six operating objectives that your company has to do to succeed?
- Who must do what? Who is responsible for doing what in order for this to happen? What is each person’s area of specialty?
3. Over-Communicate Clarity – Communicate the answers to the above six questions.
People must hear things 7 times before they believe it to be true and important. Leaders have to communicate it so much that people can imitate you saying it. Great leaders of many organizations succeed because they never get tired of communicating the message. They enjoy hearing the simple message cascade through the organization until it is heard by everyone several times.
4. Reinforce Clarity – Leaders must repeatedly reinforce the answers to the six critical questions. Any process that involves people, from hiring and employee dismissal to performance management and decision-making, needs to be custom designed to intentionally support and emphasize the uniqueness of the organization. Rewards and recognition are aligned with achievement toward stated goals and objectives of the organization.
In addition, healthy organizations work to improve their meetings to prevent unhealthiness from destroying all that you have built. Keep a thematic goal foremost in everyone’s mind as you evaluate your progress as a team at each staff meeting. Then set your agenda for the day based on what the team identifies as critical in terms of revenue, expenses, production levels, market share, and customer satisfaction. (For more details, read the WOA blog: Meetings That Inspire and Improve Performance)
Why is becoming healthy so important?
The smartest organization in the world, the one that has mastered strategy, finance, marketing and technology, will eventually fail if it is unhealthy. But a healthy organization will always find a way to succeed, because without politics and confusion, it will inevitably become smarter and tap into every bit of intelligence and talent that it has. As Patrick Lencioni puts it, “When politics, ambiguity, dysfunction and confusion are reduced to a minimum, people are empowered to design products, serve customers, solve problems and help one another in ways that unhealthy organization can only dream about.” Healthy organizations recover from setbacks, attract the best people and repel those who do not share the same values. They create opportunities that they did not expect and were able to accomplish more together as a cohesive team working in the same direction. The bottom line is that employees are happier, turnover is reduced, customer satisfaction and loyalty is higher, profits are greater and executives discover peace in their healthy organization as they have created an environment of success.