Frei is a professor in Harvard Business School’s technology and operations management unit and the chairwoman of the MBA required curriculum. Because Frei’s work focuses on how organizations can more effectively design service excellence, I was eager to hear her thoughts on organizational strategy. I was not disappointed.
Here are some key points I took away from the conversation.
Choose great over average. When you’re considering your points of differentiation as an organization the key is not to try to become five out of five on all aspects of your client value proposition; by diffusing your efforts as an organization among so many things you end up becoming three out of five (average) on everything.
Really great, standout companies figure out what they can sacrifice (areas where they are at about a one out of five), so they can truly be five out of five on the areas that count most to their customers.
Choose differentiation versus “me-too.” For true differentiation you need to do something that the competition can’t properly replicate. Consider the example of the Heavenly Bed Wars. Once Westin hotels rolled
out its heavenly beds campaign, all their competitors had to do was provide a similar quality of bed – a simple yet costly undertaking, the net result being that consumers now get better beds from all competing hotels. But each is still in the same price-competitive space: higher cost, lower margin and no differentiation. The trick is to focus on providing something to your customer that is difficult for your competitors to replicate.