Wednesday, January 25, 2006
3 Value disciplines
When you compare this reading to our Ford vs. Toyota discussion you can see that operation excellence is a concept from the industrial age. You identify a product, you build a process and you refine that process until the operation runs smooth as silk. Operational excellence drives efficiency, which should drive low cost production. Ford is (or was) in this realm.
A consumption centric approach however is more centered on Customer Intimacy. The article describes how, if you can understand your customer you can better meet their needs. This concept is still valid but it may have evolved over the past 10 years. In today's environment, maybe a better practice would be to create a situation where your customers tell you their needs and help other customers with their needs.
We could argue that Toyota was able to shift to Customer Intimacy because their company wasn't as tied to operational excellence as Ford was, but that may not be entirely true. Maybe Toyota was built to be a Product Leader, developed an operational excellence that enabled them to be a product leader and just stumbled on Customer Intimacy as a by product. After writing this I am not really sure anymore.
However, one thing I am still sure of is that concept of dominance in one area can make it difficult to shift to another. If your systems and support structures are built to perform one function and perform it really well, even if you are able to read the "weak" signals, you may not be able to shift gears fast enough.
Here is snipet of the article I mentioned (it was published in the Jan-Feb 1993 edition of the Harvard Business Review):
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