Article in Brief: Great brands stand out in one of three areas — operational, product or service excellence. Which market discipline is best for your business? Let’s go deeper…
by Keith Reynold Jennings
Many years ago, I read a book built on a bold insight.
It said that if you look at all the great brands out there, each excels through only one of three market disciplines:
- Operational excellence
- Product excellence
- Service excellence
That was 1997. The book was The Discipline of Market Leaders by Michael Treacy and Fred Wiersema. Today, as I look at the 17 businesses in my organization’s portfolio, as well as the numerous national and regional competitors in our space, the insights in this book are as true as ever.
If branding is the art and science of making and delivering on a bold promise, then the core organizational competency that drives a brand is key.
Let’s look at each core discipline, so you can figure out where your business could stand out. However, keep in mind that this core discipline isn’t driven by leadership’s preference. It’s driven by the client’s needs.
Companies that dominate markets through operational excellence focus on selection, savings and speed.
Amazon, Walmart and McDonalds are classic examples of operationally excellent companies. When we shop at one of these, we know what to expect, how the system works and we can depend on getting in, finding what we want and getting out quickly and easily. Plus, we tend to choose these brands to save money. And, we wind up spending more money on more things every time they suck us in. Costco anyone?
Ikea comes to mind, too, as a no-hassle, wide selection, low prices brand that is able to consistently deliver through its focus on operational excellence. You’re probably thinking of other brands like these too.
Companies that focus on product excellence tend to be elite or luxury brands. We’re drawn to them because, well, they’re the best.
Dyson, Tesla, Louis Vuitton, Marc Jacobs, Massachusetts Institute of Technology, Mayo Clinic, Apple and others like them are known for their trend-setting, best-of-breed offerings. They’re not cheap. They’re sometimes experimental and often not functionally perfect. And they’re certainly not for everyone. And that’s what makes them distinct as brands.
One of my favorite brands in this category is Moog Music. What’s yours?
They know your name. They remember your preferences. They know where and when you’ve had good and bad experiences. And they love going the extra mile to surprise, delight and pamper you.
Companies that excel at service excellence are obsessed with custom(er) experiences, with an emphasis on custom. They design their operations to create personal, unique experiences for thousands to millions of customers.
Disney, Nordstrom and Ritz Carlton are examples of brands known for wowing their customers. Who else can you think of?
Don’t Let These Descriptions Fool You
Don’t get siloed by these descriptions, though. Product companies aren’t limited to product excellence. They can excel at service or operational excellence. And service companies can excel at product excellence.
Take the consulting world. McKinsey & Company and The Advisory Board Company are renown for productizing their content into highly valued assets.
The key is to build your brand through a market discipline that gives your clients what they want:
- Low hassle/large selection (operational excellence)
- The latest and greatest (product excellence)
- Personalization/customization (service excellence)
Back in the early 2000s, hospitals across the U.S. got turned on to service excellence. I was in the hospital world at that time. And it became clear to me that service excellence, though a good idea, wasn’t what patients and their families really wanted.
Patients didn’t want live harp music in their rooms. Or a stream of suits checking on them. They wanted to get well enough to get the hell out of the hospital! That requires operational, not service excellence.
Dual Discipline Brands (A Rare Breed, Indeed)
Is it possible for a brand to be great at more than one of these three areas? Sure, but you’ll find that one market discipline is dominant and the other is supportive.
Chick-Fil-A is a great example of this. They stand head and shoulders above the competition through service excellence. But they couldn’t have achieved the growth and rabid fan base they have without operational excellence as their core.
Think about it. You want to grab a bite for you and your kids. What you want is to get in and out as quickly as possible. You expect to get exactly what you ordered, and for it to be warm and good. Whether or not the staff are nice and attentive is secondary.
What CFA does so well is that they excel at operational excellence (their core market discipline). But they’ve taken their brand to the next level through service excellence through daddy-daughter date nights and special services for moms with kids. They go out of their way to take care of their customers.
It’s this unique one-two punch that keeps cars lined around their parking lots morning, afternoon and evening (except on Sundays).
What About You?
Whether you’re marketing an idea, product, service or experience, you should work intentionally to move toward one of these core disciplines.
Keep in mind that unless you’re a well-funded brand with a deep, logistical infrastructure, you should probably avoid operational excellence and focus on product or service excellence.
Whether you’re a tech company, professional services firm, physician practice or hospital service line, knowing how to wow your clients — and having the systems in place to deliver on it — will take you and your brand to the next level.
Image from Pexels
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