The Equity in Quality:
Boost the Bottom Line Through Performance
By Dan Coughlin
Disney Company re-releases a fifty-year-old animated film, and
it makes millions.
creates a cell phone, and the world holds its breath.
makes a hybrid car, and in the era of $4 per gallon gasoline the
Prius becomes a legend.
Performance Enhancement or Marketing Splash? If you only have
$10,000 to improve your business, should you pour it into a
marketing initiative or a performance initiative? I vote for
improving performance every time. The long-term payback will be
quality you provide to customers is the value they receive from the
performance of your products and services.
refers to number of mistakes per million parts in a manufacturing
process. It also refers to the refreshing taste of a dessert at a
frozen custard stand and the speed with which a pizza is delivered
and the friendliness of a hostess at a local restaurant. Your
marketing theme will soon be ridiculed if the actual performance
doesn’t live up to the promises made.
Quality Builds the Brand: Here’s a phrase-association game. What
do you think of when you read the following:
amazingly well designed, user-friendly computer…
Entertainment for all members of the family…
of coffee so delicious it feels like a reward…
Disney, and Starbucks first created incredible quality, and then
they became known for that quality. Notice: high quality first,
great brand second. The brand attracts and keeps lots and lots of
great customers, but you can’t successfully advertise what doesn’t
exist. The same method for enhancing quality can be used no matter
what business you are in.
Define the performance business you are in: Disney/Pixar
Animation Studio is in the motion and emotion performance business.
Their quality is wrapped up in visually appealing and emotionally
appealing films. When Pixar’s standard of quality became
dramatically greater than that of Disney’s animated films, Disney
bought them out and put them in charge.
performance are customers looking for from you? Do your customers
desire you to deliver faster (FedEx), break down less often
(Toyota), make the purchasing process easier (Amazon), or deliver
breakthrough ideas (IDEO)?
married to a certain product, service, or profit margin. Focus on
the performance you are expected to deliver. According to the June
11, 2007 issue of BusinessWeek, 3M almost smothered its creativity
through Six Sigma. 3M is expected to perform as an innovative
company. Potentially ruining that creative culture in exchange for
short-term profits was not a good trade off.
Identify your current standard: So how are you really
performing in the areas that customers expect you to perform in? Go
ask your customers a simple question: “In terms of our performance
for you, what are we doing really well, what are we average or below
average at compared to the competition, and how could we perform
better for you?” If you ask fifteen customers that question, you
will start to get an idea of your current reality.
shop the competition. Study the performance they are delivering.
Look at it from the customer’s point of view. Even a subtle idea
like having a greeter in a fast food restaurant can be a difference
maker. What is the competition doing better than you right now?
Focus on only two points: As you work to enhance quality,
focus on only two points: the point just ahead of the best performer
in the world and the point just ahead of where you are right now.
Who is the best performer in the world in your particular area? What
makes that organization’s performance better than yours? That is the
only point that matters to customers. They want to be with the best
of the best.
keeping the highest standard in the world in mind, focus your
efforts on getting to the point just ahead of where you are right
now. Each day move forward one step in terms of providing greater
quality. And keep moving until you reach the spot just ahead of the
best performer in the world.
The Tiger Woods Syndrome: There is one danger to be on the
look out for. One day you will be the best in the world in
your particular performance area. Then what do you do? Tiger Woods
and Michael Jordan faced that problem, but instead of looking back
at the second best performer they kept their eyes focused on raising
their own performance bar.
are the best performer in the world, ask yourself one simple
question, “How can I make tomorrow better than today in terms of the
performance I provide my customers?”
Loop back with customers: Customers have a neat way of
keeping companies grounded in reality. Just in case you thought
about coasting on past performances or a powerful brand, remember
that customers don’t care about past performances or great brands.
Continue to engage customers in meaningful conversations about the
quality they receive from you and what would make it better.
Equity Increases as Quality Rises: Every time you increase your
relevant business performance to customers, it’s like putting money
in the bank. Customers become more loyal, they purchase more of your
products and services, they tell other people about the quality you
offer, and they keep coming back for years and years. Quality is the
real secret formula for long-term success.
Read other articles and learn more
about Dan Coughlin.
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